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What are CRISIL ratings on FDs?

CRISIL is an agency that evaluates the credibility of an issuer on the basis of several factors like liquidity, earning strength, financial background and more. Even though FDs are the safest investment options for retirement, you should check its CRISIL rating before investing to ensure that you get assured returns at maturity. You can check the CRISIL rating of FDs from different banks, financial institutions and NBFCs to make an informed decision.
Types of FD CRISIL ratings:

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FAAA

It indicates that these FDs are highly secure and that you will receive the principal and interest on maturity without any delay.

FAA

It indicates that you will get the principal and interest on time and that your invested sum will be offered high degree of safety. However, in comparison to the FAAA rating, they have relatively lower degree of safety.

FA

Investments with this rating are adequately safe, which means the principal and interest payment will be satisfactory. Changes in circumstances may lead to changes in your issuer’s liquidity, so be careful.

FB

The degree of safety for these investments is low as repayment of principal and interest is susceptible to risk.

FC

Chances of timely payment of principal and interest are doubtful in case of FDs with FC ranking. Adverse business or economic conditions may land your issuer in a condition where they are unable to pay your principal and interest.

FD

This indicates that FDs are already in default or are expected to be in default at the time of maturity.

NM

This rating stands for meaningless and is usually given if the issuer is under reorganisation, liquidation, or serving a court order. Stay away from FDs with this rating.

●Factors that affect CRISIL rating for FDs

CRISIL takes in to account an issuer’s liquidity, their debt repayment capacity and past record to rank their FDs. Factors that affect CRISIL rating for FDs are:

  • Issuer’s liquidity
  • Renewal rate for the FD
  • Maturity profile of the FD
  • Granularity of the FD programme
  • Mean return and volatility
  • Superior return score

If you are looking for FDs with higher CRISIL ratings like FAAA, invest in Fixed Deposits from reputed issuers like Bajaj Finance. You can earn interest of up to 8.75% by investing in cumulative FD for at least 36 months as a regular investor and on the same FD interest up to 9.10% as a senior citizen. Moreover, you will get 0.25% higher interest on this FD upon renewal.

Now that you know everything about CRISIL rating of FDs, consider it as a deciding factor while selecting your FD issuer and in determining the risk associated. Avoid common mistakes while investing in FDs like ignoring the CRISIL rating and grow your wealth to meet all your goals with ease.