When looking to invest in a company fixed deposit, you must have noticed that these instruments have certain ratings denoted as ‘AAA’ or some even the words ‘AAA ICRA Fixed Deposit’. These ratings are assigned by specific agencies, and represent the overall standing of the FD. Simply put, it is the credit agency’s rating for the instrument based on its stability and credibility.

 

ICRA or Investment Information and Credit Rating Agency of India is a public company set up by leading financial institutions, commercial banks and financial services companies in 1991. The ICRA fixed deposit rating scale is one that it uses to determine credit risk. 

ICRA ratings denote the degree of safety regarding timely servicing of financial obligations. ICRA provides ratings by examining factors such as cash flow, liquidity, financial flexibility, past record of debt servicing, hedging of risks, marketing strategies, etc. As such, the ICRA fixed deposit rating plays a vital role in identifying credible financiers. 

 

It is a marker of the financier’s ability to make timely interest and principal payments to their investors. Naturally, the ICRA AAA rated companies for FD investments are some of the best to consider, as they have proven their stability. 

But what does the ICRA fixed deposit rating mean, and what is the scale of ratings issued? For answers to these questions and more, read on.  

• ICRA ratings have a significant role in assessing the credit risks of debt securities. The assessment of different institutions helps understand the risk and safety of the issuer.

• ICRA ratings help identify the issuers credibility and provide reliable service to investors, issuers, intermediaries and regulators.

• ICRA credit ratings ensure transparency in the money and capital market and help bring about standardisation.

• ICRA ratings give the investors a ranking of default loss probability of the investment instrument and helps them know all about its safety. This will help investors make informed decisions with objective data.

• Intermediaries like investment bankers can use the ICRA ratings to set the price and marketing strategies, whereas regulators can use them to provide benchmarks and rules for the financial market.

To evaluate the safety of the financier, you need to keep track of rating by ICRA. Fixed deposit offerings by companies will have these ratings, and you should look for them, if not mentioned. 

 

Deposit schemes like fixed deposits assure returns on investment and are relatively risk-free. However, before depositing in the FD category, you should check the ICRA fixed deposit rating. This helps assess the stability of the financial instrument and the chances of getting returns on time.

 

ICRA ratings are mainly given for long-term, medium-term and short-term investments. Here is a quick overview of these. 

• Long-term Investments - All Bonds, Non-convertible debentures, and other debt instruments other than Public Deposits with original maturity over one year comes under this category.

• Short-term Investments - All financial instruments with original maturity within one year come under this category.

1. ICRA’s Long-Term Rating Scale

2. ICRA’s Short-Term Rating Scale 

Let us check out the ICRA fixed deposit rating format here.

For the rating categories, certain modifiers + (plus) or – (minus) may be added to the ratings. As an investor, you should know that these indicate a relative position of the rating in its category. For instance, an ‘AA+’ rating is higher than the ‘AA’ rating. 

 

Based on this scale it is clear that the ICRA AAA rated companies for FD investments are the best choice. These are most trustworthy and have almost nil default risk. To know about some of the best ICRA AAA-rated companies for FD investments, read on.

While considering opening an FD, you should check out the ICRA fixed deposit ratings. Here are the ICRA ratings of our partners.