Investment-Grade

A rating assigned to bonds or other debt securities by credit rating agencies, including Moody’s, S&P, and Fitch . The rating indicates the risk that an investment might default. A rating of AAA through BBB- by S&P and Fitch, or AAA through Baa3 by Moody’s, is considered investment-grade while ratings below those levels are considered speculative-grade, also known as junk bonds. The higher the rating, the lower the risk – and the lower the interest rate that is paid to investors. See Default Risk, Money Market Fund, Commercial Paper

Glossary