An Investment grade is a rating that indicates whether municipal or corporate bonds have a low risk of default. Bonds having an investment-grade rating means the chances of the issuer failing to repay to bondholders is greater than bonds having a non-investment-grade rating.

Rating agencies like CRISIL, ICRA, CARE provide ratings in the form of upper and lower case letters like "A" and "B" to identify the bond's caliber. Investment-grade ratings are mentioned below :

The benefits of investing in investment-grade bonds are:

1. A company issuing Investment-grade bonds has an overall excellent track record in the capital market and the risk of going bankrupt is zero. This generates faith in the investor’s perspective to issue such bonds as they are safer in terms of taking risks.

2. Interest rate is lesser as compared to high yield bond but the risk of issuer going default is negligible

3. It helps investors to make an informed decision based on the ratings of the bond

4. The companies issuing the IG bonds help them to represent their financial strength and their creditworthiness.

5. Investors do not generally lose money due to the low risk of default.

Investment-grade bonds are preferred by investors who are not willing to take high risks and want to have a steady fixed income. An investment-grade bond is always a good option to diversify the portfolio of an investor. Investors should look into all terms and conditions of the bond like the tenor, payment terms, interest rate calculation, and so on before putting their money on it. Bondskart has a team of experts who will make sure you are always making an informed investment decision.