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Since 1987, CRISIL (Credit Ratings and Information Services of India Limited) has been managing the credit rating system in the country. They are known to rate both short-term investment options as well as debt instruments such as bonds, bank loans, fixed deposits and hybrid capital instruments.

What is the role of CRISIL?

CRISIL rates an array of financial products offered by more than 190 financial sectors including banks, NBFCs, financial institutions, public holding companies, urban local bodies, mutual fund companies, and microfinance institutions. The ratings given by CRISIL are trustworthy and provides assistance to you in your decision-making process. This rating bridges the gap between you and the funding or investment entities.

How does CRISIL rate FDs?

Numerous companies and financial institutions diversify their funding sources by offering fixed deposits. CRISIL rates these FD offerings with a contracted maturity or tenor of more than one year on a specific rating scale. The CRISIL Rating for FD system includes a rating scale from FAAA to FD. Based on the nomenclature of each rating, you can decide the quality of an FD and thereby choose the one that has the highest rating. CRISIL also rates short-term FDs offered by banks that mature in less than a year on a scale of CRISILA1+ to CRISIL A5.

Here is the rating nomenclature for FDs that have a maturity period of more than a year.

  • NM: Not meaningful
  • FD: Default
  • FC: High risk
  • FB: Inadequate safety
  • FA: Adequate safety
  • FAA: High safety
  • FAAA: Highest safety

How do you benefit from CRISIL Rating for FDs?

When you choose to invest in fixed deposits, checking the FD interest rates of varied offerings is not enough. You must compare FDs basis their CRISIL ratings. CRISIL rates an issuer’s FD offerings after considering a number of factors such as liquidity capacity, maturity profile of the FD, renewal rate offered on the fixed deposit, and the granularity of the FD programme.

To put it in simpler terms, CRISIL measures the debt repayment capacity of the issuer alongside their fund holding and their credibility in the market. All these factors, analysed cumulatively, indicate the safety of your returns from an FD. Thus, be it cumulative FDs or non-cumulative FDs, take into account these ratings in order to choose a trustworthy issuer.

An investment is a long-term commitment. When you are putting aside a portion of your income or savings as an investment, you are sure to want some security for your money. So, choose a long-term or a short-term FD based on your preference and select a trustworthy financial institution such as Bajaj Finance. This FD comes with a FAAA/Stable rating from CRISIL. They are one of the most trustworthy companies in India today, so you can invest without any fear of losing your invested amount and gain from high earnings of 8.40% to 8.75% on your investment.

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