Finance

What Is the Bajaj Finance Fixed Deposit Rating by ICRA?

Whenever you have started looking for FDs, non-corporate deposits or bonds to invest in, you would have come across the terms – ICRA rating and CRISIL Rating. These are world-renowned credit rating agencies that rank companies and instruments issued by them on specific parameters of liquidity and repayment history along with the quality of credit management internally. 

This ranking holds importance for a retail investor like you to understand the reliability of the instruments you are going to invest in.

However, in several of those choices, no return is guaranteed. It would be best if you remained exposed to the volatility of market movement to have a chance of seeing your invested capital increase. It also helps you decide the risk-return comparison between two similar instruments. Investors have lots of choices when it comes to earning good returns.

Because both these instruments have a fixed rate of interest, it seems natural to choose the one which offers the highest standard of interest. For example, if you have two 10-year NCDs offering a coupon of 8% and 8.75% respectively, then everyone would like to choose the latter, isn’t it? But why do you think one issuer would offer a lower rate of interest than the other knowing that investors would prefer the one with a higher rate of interest?

This is because of one aspect which is not at the forefront of investors’ mind – the NCDs (or FDs) credit rating.

Read Also, How to get out of financial crisis

The Bajaj Finance Fixed Deposit Rating by ICRA

ICRA is a credit rating agency in India which rates financial instruments like NCDs and FDs. These ratings can help you ascertain how safe your investment is. In order to look at this in detail, let’s refer to the following table Bajaj Finance Fixed Deposit Rating:

ICRA’s Ratings for NCDs and FDs
NCD Rating ScaleFD Rating ScaleWhat it MeansLevel of Credit Risk
Long-Term Rating ScaleMedium-Term Rating Scale
[ICRA]AAAMAAAHighest Degree of SafetyLowest
[ICRA]AAMAAHigh Degree of SafetyVery Low
[ICRA]AMAAdequate Degree of SafetyLow
[ICRA]BBBModerate Degree of SafetyModerate
[ICRA]BBModerate Risk of DefaultModerate to High
[ICRA]BMBHigh Risk of DefaultHigh
[ICRA]CMCVery High Risk of DefaultVery High
[ICRA]DMDIn Default or Expected to be In DefaultHighest

While ICRA rates NCDs on the long-term rating scale, it rates Fixed deposits on the medium-term rating scale which it uses only for public deposit programs. Its long-term rating scale focuses on those debt instruments (excluding public deposits) which have an original maturity of over one year. It has a different rating scale for short-run instruments that do not have an original maturity exceeding a year.

What the ICRA credit rating means

The ratings given to NCDs and FDs according to the table given above are an indication of the risk an investor is taking while investing in them. This can help you in being aware of the assumed risk as well as in deciding which instrument to invest in.

A simple rule of thumb is that an instrument issued for a certain value carries a certain risk, and then another instrument issued for the same meaning, but with a higher risk of paying higher interest rates. 

Bajaj Finance Fixed Deposite Rating – Best Options with Low Risk

Bajaj Finance Fixed Deposit has been rated MAAA/Stable by ICRA. With the Best rating by ICRA, Bajaj Finance Fixed Deposit offers lucrative interest rates on its fixed deposits. It offers cumulative and non-cumulative options starting from 7.72% for a 1-year return and goes up to 8.95% for a senior citizen for a cumulative 3-year Fixed deposit. These rates are offered in spite of the trend of lowering interest rates in the economy. Make the best of these rates with safety and guarantee of high ICRA ratings.

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