Financial glossary

Every term, in plain English

74 words you’ll meet on fund pages, statements and policy documents — each with a short definition, a worked example where it helps, and the tools that put it to use.

Most looked up

17 of 74 terms in Fixed income

Terms starting with A

Accrued interest
Interest a bond has earned since its last coupon date but not yet paid; a buyer usually pays it to the seller on top of the quoted price.
Fixed income

Terms starting with C

Coupon
The interest a bond pays its holder, stated as an annual percentage of the bond’s face value and paid on fixed dates.
Fixed income
Credit rating
A rating agency’s opinion of how likely a borrower is to pay interest and principal on time, on a scale running from AAA down to D.
Fixed income
Credit risk
The risk that a bond issuer or borrower fails to pay interest or repay principal in full and on time.
Fixed income
Cumulative FD
A fixed deposit that reinvests interest within the deposit and pays principal plus all accumulated interest together at maturity.
Fixed income
Current yield
A bond’s annual coupon divided by its current market price — a quick measure of income relative to what you pay today.
Fixed income

Terms starting with D

Deposit insurance
Cover from DICGC, an RBI subsidiary, that protects bank deposits up to ₹5 lakh per depositor per bank if an insured bank fails.
Fixed income
Duration
The weighted average time, in years, to receive a bond’s cash flows — and a guide to how sensitive its price is to interest rates.
Fixed income

Terms starting with F

Face value
The nominal amount of a bond — what the issuer repays at maturity and the base on which coupon payments are calculated.
Fixed income
Fixed deposit
A deposit with a bank or finance company that earns a fixed interest rate for a chosen term, with principal and interest due at maturity.
Fixed income

Terms starting with G

G-Sec
Government Security
A tradeable debt instrument issued by the central or a state government to borrow money, carrying very low credit risk in the domestic market.
Fixed income

Terms starting with I

Interest rate risk
The risk that a bond’s price falls when market interest rates rise — larger for bonds and debt funds with longer duration.
Fixed income

Terms starting with M

Maturity
The date on which a bond, deposit or other fixed-term investment ends and its principal is due to be repaid.
Fixed income
Modified duration
An estimate of how much a bond’s price changes, in percent, for a one percentage point change in interest rates.
Fixed income

Terms starting with N

Non-cumulative FD
A fixed deposit that pays interest out at regular intervals — monthly, quarterly, half-yearly or yearly — and returns the principal at maturity.
Fixed income

Terms starting with Y

YTM
Yield to Maturity
The annualised return on a bond bought at today’s price and held to maturity, if every payment arrives as promised and coupons are reinvested at that rate.
Fixed income

Terms starting with Z

Zero-coupon bond
A bond that pays no periodic interest; it is bought at a discount to face value and repays the full face value at maturity.
Fixed income