Bond credit ratings, explained in plain English
Every listed bond carries a rating - AAA, AA+, BBB- - assigned by a SEBI-registered agency (CRISIL, ICRA, CARE, India Ratings). It grades one thing: how likely the issuer is to pay you back. Lower grade → higher default risk → higher yield offered to compensate. Here is the whole scale, with the live yields each grade pays right now.
What high-yield corporate bonds pay
Corporate bonds make up the bulk of listings on RightBonds, with yields to maturity reaching 15%+ on higher-risk issuers. Credit ratings span AAA, AA, A and BBB - a higher rating means lower default risk and typically a lower yield. Sort by YTM to find the highest-yielding bonds, then check the rating and tenure to match your risk appetite.
The scale, with today's yields
| Grade | Meaning | Live yields (Jul 2026) |
|---|---|---|
| SOV | a sovereign instrument carrying the credit of the Government of India | 5.15% - 7.25% (avg 6.1%) |
| AAA | the highest credit-safety grade | 7.25% - 8% (avg 7.6%) |
| AA+ | a very high credit-safety grade | 8.1% - 9.15% (avg 8.6%) |
| AA | a high credit-safety grade | 7% - 10.5% (avg 9%) |
| AA- | a high credit-safety grade | 8% - 11.5% (avg 9.5%) |
| A+ | an adequate credit-safety grade | 8.5% - 11.1% (avg 10.1%) |
| A | an adequate credit-safety grade | 8% - 13% (avg 10.4%) |
| A- | an adequate credit-safety grade | 8.5% - 13.8% (avg 11.5%) |
| BBB+ | a moderate credit-safety grade | 9% - 14.05% (avg 11.7%) |
| BBB | a moderate credit-safety grade | 10.35% - 14.5% (avg 12.5%) |
| BBB- | a moderate credit-safety grade - the lowest investment-grade band | 9% - 15% (avg 13.3%) |
Grades with fewer than 3 current listings are omitted. Yields refresh daily with our scrape.
How to read the letters
- AAA / SOV - highest safety; SOV is sovereign (Government of India) credit.
- AA family - very high safety; a notch of extra yield over AAA.
- A family - adequate safety; meaningfully higher yields, real credit work needed.
- BBB family - moderate safety, the lowest investment-grade band. Below BBB- is speculative ("junk") - rare on retail platforms.
- + / - - position within the grade: AA+ is the strongest AA, AA- the weakest.
What ratings don't tell you
Ratings are paid for by the issuer, updated with a lag, and grade only default probability - not liquidity, not price swings, not concentration in your portfolio. Use them as a first filter, then look at the issuer's business. IL&FS was AAA weeks before it defaulted in 2018; treat the grade as an opinion with a good-but-imperfect track record, and diversify regardless. The yield spread over an FD tells you what the market thinks - our bonds vs FD guide shows how to weigh it, and the buying guide covers execution.
Frequently asked questions
Pick your comfort grade
Every tracked bond, grouped by rating with live yields per grade.
Browse bonds by ratingWho assigns bond ratings in India?
SEBI-registered credit rating agencies - CRISIL, ICRA, CARE, India Ratings and others. The issuer pays for the rating, which is why serious investors also read the rating rationale document, not just the letters.
Is a AAA bond risk-free?
No. AAA means the agency judges default risk to be the lowest on its scale - but ratings are opinions and can be downgraded. Only sovereign instruments (SOV) carry the credit of the Government of India.
Why do lower-rated bonds pay higher yields?
Investors demand compensation for taking more default risk. A BBB issuer must offer several percentage points more than a AAA issuer to attract the same money - that spread is the price of risk.
What does the minus or plus after a rating mean?
A modifier within the grade: AA+ is the strongest AA, AA- the weakest. The step from AA- to A+ is a full grade change, a bigger move than AA to AA-.
What is investment grade?
BBB- and above. Below that (BB+ and lower) is speculative or "junk" grade, where default risk rises sharply. Most bonds listed on Indian retail platforms are investment grade.