AA-rated bonds carry the second-highest credit rating tier from SEBI-registered agencies like CRISIL, ICRA, and CARE — defined by the agencies as a high degree of safety regarding timely debt servicing, one notch below AAA. In India, AA-tier bonds (AA+, AA, AA-) typically yield 8–10%, modestly above comparable AAA bonds.
AA is the second-highest credit rating tier on the Indian scale, covering AA+, AA, and AA-. Rating agencies such as CRISIL, ICRA, CARE, and India Ratings define AA as a high degree of safety regarding timely servicing of financial obligations — one notch below AAA. AA-rated issuers are typically large, established companies and NBFCs with strong balance sheets. Yields usually sit 0.5–1.5% above comparable AAA bonds, reflecting the incremental credit risk. Ratings are reviewed periodically and can move up or down with issuer fundamentals.
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What does an AA rating mean for bonds?
AA is the second-highest credit rating tier assigned by SEBI-registered agencies like CRISIL, ICRA, and CARE. The agencies define it as a high degree of safety regarding timely servicing of financial obligations. AA+, AA, and AA- are notches within the tier — credit risk is higher than AAA but lower than the A and BBB tiers.
How do AA bond yields compare with AAA bonds and fixed deposits?
AA-tier bonds in India typically yield 8–10%, roughly 0.5–1.5% above AAA bonds of similar tenure and above most bank fixed deposit rates. The spread compensates for incremental credit risk. Post-tax outcomes depend on your income tax slab, so comparisons are most meaningful on a post-tax basis.
What risks remain in AA-rated bonds?
AA-rated bonds still carry credit risk (ratings can be downgraded), interest-rate risk (prices fall when rates rise), liquidity risk, and reinvestment risk. A rating is an opinion at a point in time, not a guarantee — reading the rating rationale and outlook published by the agency adds useful context.
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Data is for informational purposes only. BondDekho is not SEBI-registered and does not provide investment advice. Bond yields and ratings are subject to change. Verify details on respective platforms before investing. Sorted by Yield to Maturity. Not a recommendation.