Two NBFC fixed deposits. Similar tenures. One pays 7.40%* p.a., the other offers 7.80%* p.a. Most investors go for the higher rate. But the right question isn't which rate is higher — it's which institution is more likely to honour that rate at maturity.
That's what credit ratings exist to answer. And for anyone investing in an NBFC FD, understanding how agencies like ICRA assess institutions — and what those ratings actually tell you — is the most important due diligence step most investors skip.
What ICRA Is, and Why It Matters
ICRA (Investment Information and Credit Rating Agency of India Limited) is an independent credit rating agency incorporated in 1991, listed on both NSE and BSE. Moody's Investors Service holds a majority stake in ICRA, giving it access to Moody's global rating methodology and risk assessment frameworks.
ICRA rates rupee-denominated debt instruments issued by commercial banks, NBFCs, financial institutions, PSUs, and municipalities, among others. Its ratings are regulated by SEBI under the SEBI (Credit Rating Agencies) Regulations, 1999 — meaning they're not marketing claims. They're formal, monitored assessments.
These regulations require rating agencies to follow defined methodologies, conduct periodic surveillance of rated instruments, and disclose rating changes or updates to ensure transparency and consistency.
For FD investors specifically, an ICRA rating FD assessment tells you one thing with precision: how the agency evaluates the institution's capacity to meet its financial obligations — including repaying depositors at maturity.
The ICRA Rating Scale for FDs
For instruments with a tenure exceeding one year — which covers all NBFC fixed deposits, given the 12-month minimum — ICRA's rating scale is as follows:
Ratings from AA to B may also carry a "+" or "–" modifier, indicating relative position within the category. So [ICRA]AA+ sits above [ICRA]AA but below [ICRA]AAA.
One important clarification: ICRA ratings focus on credit risk specifically — not other risks like interest rate changes or market fluctuations. They tell you about the institution's creditworthiness. They don't tell you what the RBI will do next quarter.
Also read: Everything You Need to Know About Fixed Deposits in India
What the Ratings Don't Tell You
Credit ratings are independent assessments — not endorsements. All published ratings are available on the respective agency's website and on SEBI's regulatory filings. Rating history matters too: a steady AAA over five years carries more weight than a freshly assigned AAA. A rating is a point-in-time opinion, reviewed periodically. Institutions are re-assessed regularly, and ratings can be revised upward or downward.
This is also why checking the outlook alongside the rating matters. A rating of [ICRA]AA+ with a "Watch with Positive Implications" outlook suggests an upgrade may be imminent. A "Negative" outlook, conversely, signals potential downward revision.
Shriram Finance's Current Rating Position
In April 2026, following the completion of MUFG Bank's strategic equity investment, ICRA upgraded Shriram Finance's rating from [ICRA]AA+(Stable) to [ICRA]AAA; Stable. CARE, CRISIL, and India Ratings made parallel upgrades around the same period.
Shriram Finance is now rated across all four major domestic agencies: {{CRISIL_Ratings}}
AAA is the highest rating on each agency's respective scale. For FD investors, this means all four independent agencies — assessing Shriram Finance's financial strength, liquidity, asset quality, and debt-servicing record — reached the same conclusion. The Shriram Unnati Fixed Deposit specifically carries this rating, not just the parent entity.
How to Check an FD's Credit Rating Before You Invest
Verify ratings directly on the respective agency's website rather than relying only on secondary sources. Here's where to check each agency:
- ICRA:in
- CRISIL:com
- CARE Ratings:com
- India Ratings:co.in
Search the institution's name and look for the rating assigned to their fixed deposit programme or non-convertible debentures. Cross-reference the date of the rating and the outlook — "Stable" means the agency does not expect a near-term revision in either direction.
What Else to Evaluate Before Committing to an NBFC FD
A credit rating is the starting point, not the full picture. When evaluating an NBFC FD, check for:
Interest rate structure — Compare rates for your specific tenure and investor category. Rates that seem outlier-high versus comparable rated institutions may warrant additional scrutiny.
Tenure flexibility — Does the institution offer tenures that match your actual goal timeline? With Shriram Finance, tenures run from 12 to 60 months.
Payout options — Cumulative (interest reinvested, paid at maturity) or non-cumulative (paid at your chosen interval — monthly, quarterly, half-yearly, or yearly).
Premature withdrawal terms — Understand the penalty before investing, not after.
Shriram Unnati Fixed Deposit offers rates up to {{FD}} (inclusive of {{FD_Senior}} for senior citizens and {{FD_Women}} for women depositors), with a minimum investment of ₹5,000, flexible tenures from 12–60 months, and fully digital application for resident Indians.
Once satisfied, use the Shriram FD Calculator to see exactly what your deposit will grow to across different tenures.
Open your Shriram Unnati Fixed Deposit today.
FAQs
1. What is an ICRA rating?
ICRA is an independent credit rating agency incorporated in 1991, with Moody's Investors Service holding a majority stake. It evaluates the creditworthiness of debt instruments issued by banks, NBFCs, and other financial institutions. Its ratings — expressed as [ICRA]AAA through [ICRA]D — represent the agency's assessment of the issuer's ability to meet financial obligations on time. All ICRA ratings are regulated by SEBI.
2. What does an AAA rating mean for an FD?
Securities rated [ICRA]AAA are considered to have the highest degree of dependability regarding timely servicing of financial obligations, carrying the lowest credit risk on ICRA's scale. The same designation applies to CARE AAA, CRISIL AAA, and IND AAA — each agency's own highest rating. It means the institution has been assessed as having the strongest capacity to repay depositors. It is not a guarantee, but it is the most favourable independent credit assessment available in the Indian market.
3. Are NBFC FDs riskier than bank FDs?
The key difference is that bank deposits up to ₹5 lakh are insured by DICGC, while NBFC deposits are not. However, credit risk — the institution's ability to repay — is assessed independently by rating agencies for both banks and NBFCs. An NBFC with a AAA rating from CARE, CRISIL, ICRA, and India Ratings has cleared the same rigorous creditworthiness assessment as a AAA-rated bank. The DICGC difference is real and worth knowing; it doesn't automatically make all NBFC FDs riskier than all bank FDs. Cross-check with the issuer's audited financials and NPA ratios before deciding.
4. How do I check the credit rating of an FD before investing?
Go directly to the rating agency's website — icra.in, crisil.com, careratings.com, or indiaratings.co.in — and search the institution's name. Look specifically for the rating assigned to their fixed deposit programme or non-convertible debentures. Check the date of the rating and the outlook (Stable, Positive, Negative, or Watch). A steady AAA over five years carries more weight than a freshly assigned AAA. Don't rely on the institution's own marketing material as the sole source.
5. How do I evaluate an FD before investing?
Start with the credit rating — look for at least AA or above from a SEBI-registered agency, ideally from more than one. Then check the interest rate for your specific tenure and investor category, the payout options available, and the premature withdrawal terms. Do not use the rating in isolation: cross-check with the issuer's audited financials, NPA ratios for NBFCs, and any recent regulatory actions. Finally, verify that the institution holds a valid Certificate of Registration from the RBI — this is a mandatory requirement for regulated deposit-taking NBFCs.