Before you invest in an FD, it is important to ascertain whether your chosen issuer or company is reliable, financially stable and offers a competitive interest rate. It is easy to get lured into investing in company FDs, where you’re offered higher interest rates. However, there is always a higher risk of losing your money, or encountering delays.
In order to ensure an unbiased opinion, credit rating agencies rate financiers on the basis of their creditworthiness. CRISIL is one such global analytics company, which rates investment companies in India, and helps you take the right decision with long-term and short-term investment options like fixed deposits and mutual funds.
With these CRISIL ratings for your fixed deposit, you can determine the security and safety of your investment amount, which can help you take an informed decision.
How are the safety and security ratings expressed?
It is important to not fall prey to the first attractive FD interest rate that comes your way as you do not want to invest with a company that is unable to pay back the sum due to you on maturity.
CRISIL rates FDs with a contracted maturity of more than one year as per a specific rating scale of FAAA to NM. It also rates short-term FDs that have a maturity period of less than 1 year on a scale of CRISIL A1+ to CRISIL A5.
Here is the CRISIL rating Scale for FDs offered for duration longer than one year.
- NM: Not meaningful
- FD: Default
- FC: High risk
- FB: Inadequate safety
- FA: Adequate safety
- FAA: High safety
- FAAA: Highest safety
Play it safe by selecting an FD that carries the highest safety ratings, FAA or FAAA, to secure your returns.
What parameters are CRISIL ratings based on?
CRISIL considers the issuer’s liquidity, history of debt repayment and current financial obligations to give you a clear snapshot of their credibility.
The following are the factors that are taken into account when awarding CRISIL ratings.
Maturityprofile of the FD
- Renewal rate offered on the FD
Granularityof the FD programme
- Liquidity of the issuer
Choose a company based on its FD’s CRISIL ratings to safeguard your principal amount and receive returns in a timely manner. Also look into the interest rate offered to you to earn a sizeable amount upon investing. Due to rising costs and a drop in the purchasing power of the rupee, it is a good idea to hold on to an FD for no more than 5 years to be able to combat inflation. Use tools such as an Online Fixed Deposit (FD) calculator to get a clear picture of the amount you will earn upon maturity given the FD interest rate.
Start a Fixed Deposit with Bajaj Finance not only to enjoy the highest safety rating of FAAA, but also to maximise your returns with a high interest rate. Choose a Bajaj Finance FD to earn a rate of interest of up to 8.75% when you start a cumulative FD for a minimum of 36 months. On the other hand, earn up to 9.10% interest on the same FD if you are a senior citizen. Further, you can start an FD with a nominal amount of Rs.25,000. So, don’t hesitate to deposit surplus funds in FDs to grow your wealth and cater to all your goals and needs.