ICRA ratings and their effect on Fixed Deposit

Before investing in a debt instrument, you must determine the amount of risk involved. Being cognizant of these risks enables you to take smarter investment decisions, by avoiding losses, and ensuring that you earn higher returns on your investment.
Credit rating agencies can help you get the right information and guidance about the best financiers for investments, before you start investing. ICRA, formerly known as the Investment Information and Credit Rating Agency of India Limited, is one such credit rating agency.
Established in 1991 by leading financiers, ICRA is an independent and professional investment information and Credit Rating Agency.

What is the role of ICRA ratings?

ICRAs’ credit ratings help in forming an opinion on the risk types that affect the relative ability of financiers to service their interest payment obligations and principal repayments. With ICRA’s ratings, issuers can enhance the marketability of the instrument, and help depositors and borrowers make an unbiased opinion on the relative safety of the sum on a debt instrument.

ICRA’s credit ratings can be beneficial in several ways. They are designed to:
     • Guide and educate institutional and individual investors or creditors
     • Enable borrowers and issuers to tap more resources from a wider range of the investing public, by accessing the financial        and capital market
     • Promote transparency in financial markets
     • Make fund-raising processes easy for intermediaries

With an unbiased and clear opinion about debt instruments, issuers can enhance the marketability of their instruments, thereby alleviating their financial standing in the market.

What are the rating criteria for ICRA?

The asset quality reflects the financier’s ability to manage their asset portfolio, and the credit quality of their clients. ICRA’s ratings enable depositors to take the right investment decisions, by acting as an assurance to indicate the highest degree of safety for a fund.
These ratings are awarded on the basis of several factors, which include the information available, analysis made, and interactions with the Management.
Here’s a look at ICRA’s rating system for Fixed Deposit ratings:
Rating Meaning
MAAA Highest credit quality
MAA High credit quality
MA Adequate credit quality
MB Inadequate credit quality
MC Risk-prone credit quality
MD Lowest credit quality
ICRA’s credit ratings are a measure of safety, using which you can get an assurance on whether the obligations will be repaid on time. You can also form an informed opinion on the probability of default on the instruments.

How ICRA Ratings affect Depositors?

Fixed deposits are generally, safe investment instruments that enable you to gain stable returns over a fixed period of time. Often, the lure of higher returns makes us choose financiers, offering higher interest rates. However, this can pose an additional risk, where depositors may also lose the money they invest.
However, with an unbiased credit rating by ICRA, you can determine the safety of your funds, and look for the right financier. You can also compare the ratings, and choose the best financier offering higher interest rates, while also possessing higher safety ratings by ICRA.

What are the ICRA Ratings for Bajaj Finance Fixed Deposits?

Bajaj Finance Fixed Deposits have MAAA (stable) rating from ICRA, which indicates the highest safety and lowest investment risk. Bajaj Finance FDs also have a rating of FAAA/Stable from CRISIL, which is another reason to invest in them.

With one of the highest safety ratings by CRISIL and ICRA, Bajaj Finance also offers several benefits to depositors. Some of these benefits include:
     • Higher interest rates – Bajaj Finance is offering one of the highest interest rates in the market, which makes it a preferred        financier. In addition to the high interest rates offered,
      Bajaj Finance FDs provide 0.25% higher interest rates to senior citizens
     • Minimum deposit amount of Rs.25,000 – You can start investing with just Rs.25,000, with Bajaj Finance Fixed Deposits.
     • Flexible tenor – You can easily choose your tenor, when investing in Bajaj Finance Fixed Deposits
     • Periodic payout options –When investing in Bajaj Finance FDs, you not only get to choose the option to gain from periodic         interest payouts, but also get to choose the frequency as per your convenience

Start investing in Bajaj Finance Fixed Deposits today, and benefit from assured returns, easily online application and stable returns over a flexible tenor.

Still have any doubt? Check Customer Portal to read unbiased reviews of investors or directly contact Bajaj Finance Customer Care.

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