Introduction to ICRA Rating and its Effects on a Fixed Deposit from NBFC

  • Deposit
  • 7 Days ago

Written by - Shriram

The safety of investments has been a significant concern for investors since COVID-19 disrupted the economy worldwide. Investors have started to think twice before they make an investment decision. However, the expansion of safe and convenient FD plans from Shriram brings back a ray of hope and safety when making an investment.

Investors use an FD to save a considerable amount of money to achieve long-term financial goals like buying a house, planning higher education for children, or building a secure retirement plan.

A Fixed Deposit (FD) is one of the safest investment choices that has created trust in investors' minds. It is a reliable investment instrument that can yield assured returns, capital protection, and attractive interest rates. NBFCs like Shriram increase investors' trust in Fixed Deposit investments because Shriram offers one of the best FD plans with higher returns and higher safety.

What are ICRA Ratings?

ICRA (Investment Information and Credit Rating Agency) is an independent credit rating agency in India that evaluates debt instruments and institutions. ICRA ratings are the ranking relative used to assess the credit risk of NBFCs within India. The beneficiaries of ICRA rating include investors, issuers, intermediaries, and regulators. The highest rating scale of ICRA is AAA (Highest Safety).
ICRA examines the strengths and weaknesses using factors like financial flexibility, cash flow, liquidity, past record of debt servicing, and hedging of risks to provide respective ratings. 

What are the Effects of ICRA Ratings on a Fixed Deposit?

ICRA rating helps investors to make a clear investment decision. As ICRA ratings are unbiased, it would be easier for investors to look for the best investment option, like Shriram Fixed Deposit, which offers a higher safety over other investment options that make unrealistic promises on an FD investment.
Here is a table that explains ICRA ratings and their respective remarks;
  AGENCY RATING REMARK
1 [ICRA]AAA Highest Safety
2 [ICRA]AA Highest Safety – Low Credit Risk
3 [ICRA]A Adequate Safety - Low Credit Risk
4 [ICRA]BBB Moderate Safety and Moderate Credit Risk
5 [ICRA]BB Moderate Risk
6 [ICRA]B High Risk of Default
7 [ICRA]C Very High Risk of Default
8 [ICRA]D Expected to be in Default Soon

Note: ICRA ratings might have modifiers like + (plus) or – (minus) in a few ratings. These modifiers indicate their position within the rating category. Shriram is rated “[ICRA]AA+ (Stable)” by ICRA, meaning the safety rating is an improved rating than [ICRA]AA.

Top 3 Reasons that an FD with Shriram is Safe for Investment

Let’s take a look at the top three reasons why Shriram Fixed Deposit is safe for investment;
Credibility – Shriram is one of India's most renowned and credible NBFCs that offers investors flexible fixed deposit plans. Besides, Shriram acts proactively with a strong risk management model to minimise the tendency of any risks for investors, thereby increasing the credibility of Shriram among its customers.
Capital Safety – Shriram holds CARE AA ratings, and Shriram Fixed Deposit is considered to have an adequate degree of safety regarding timely servicing of financial obligations, meaning your capital is safe with Shriram.
Assured Returns - Shriram has safety ratings from ICRA and India Ratings & Research that assure capital security and guaranteed returns with low default risk. Investors should pick NBFCs like Shriram if they simultaneously need higher safety and good returns.

Invest Now with Shriram – Rated Highest Safety and Low Credit Risk

Shriram is rated “[ICRA]AA+ (Stable)” by ICRA for safety, which means the highest safety and low credit risk. Hence, opening a fixed deposit account with Shriram is safe and the right investment choice considering the current market condition. Besides, Shriram offers one of the highest interest rates of up to 8.75%, which is higher than most competitors. Hence, book an FD now with Shriram and watch your wealth grow quickly.

FAQs

What is the FAAA rating in FD?

FAAA rating in FD is given by CRISIL (Credit Rating Information Services of India Limited), which indicates the highest degree of and minimal risk associated.

Which is better FAAA or MAAA?

FAAA is rated by CRISIL and MAAA is rated by ICRA. However, both ratings indicate a high degree of safety and high credit quality, respectively.

What is an AAA-rated fixed deposit?

AAA-rated fixed deposit is one of the safest fixed deposits with zero default risk.

Key Highlights

  • The safety of investments has been a significant concern for investors since COVID-19 disrupted the worldwide economy.
  • ICRA (Investment Information and Credit Rating Agency) is an independent credit rating agency in India that evaluates the credit risk of NBFCs within India.
  • A Fixed Deposit (FD) is one of the safest investment choices that acts as a reliable investment instrument that can yield you assured returns, capital security, and attractive interest rates.
  • NBFCs like Shriram are rated “[ICRA]AA+ (Stable)” by ICRA for safety, which means the highest safety and low credit risk.