Finance glossary
CIBIL Score
A 3-digit credit score from 300 to 900 issued by TransUnion CIBIL that summarises an individual's credit history.
Credit Report
A detailed record of a person's borrowing and repayment history maintained by a credit bureau.
FOIR (Fixed Obligations to Income Ratio)
The share of your income already committed to existing EMIs and obligations; many lenders decline a new loan when it exceeds about 50%.
Credit Bureau
An RBI-licensed company that collects lender-reported credit data and produces your credit report and score; India has four — CIBIL, Experian, Equifax and CRIF High Mark.
Written-Off / Settled Status
Adverse credit-report statuses: 'written-off' means the lender considers the debt unlikely to be recovered; 'settled' means you paid less than the full amount owed. Both are damaging.
Credit Utilization Ratio
The percentage of your total credit limit you are currently using; keeping it below 30% is widely advised.
Hard Inquiry
A lender's full credit-report check triggered when you apply for credit; recorded on your report and can cause a small, temporary score dip.
Soft Inquiry
A credit check not tied to a credit application — e.g. a self-check, pre-approved-offer screen or background check — that does not affect your score.
Credit History
The age of credit — how long you have held and managed credit accounts; a longer, well-managed history is generally viewed favourably.
Credit Mix
The balance of secured (collateral-backed) and unsecured credit you hold; a healthy mix is generally viewed favourably but is a minor factor.
Payment History
The month-by-month record of whether you repaid credit on time; generally the most important factor in a credit score, shown via DPD on your report.
New Credit
Your recently opened accounts and recent credit applications; taking on a lot of new credit in a short period can weigh on your score.
TDS (Tax Deducted at Source)
Income tax that a payer deducts before paying interest or other income, and deposits with the government.
EMI (Equated Monthly Instalment)
A fixed monthly payment that repays a loan's principal and interest over its tenure.
SIP (Systematic Investment Plan)
A method of investing a fixed amount in a mutual fund at regular intervals.
Fixed Deposit (FD)
A deposit that locks a sum with a bank for a fixed term at a pre-agreed interest rate.
Cumulative FD
A fixed deposit where interest is compounded and paid as a lump sum at maturity, giving the highest maturity value — as opposed to a non-cumulative FD that pays interest out regularly.
FD Laddering
Splitting a lump sum across several fixed deposits with staggered maturity dates, reinvesting each as it matures — balancing returns with regular liquidity.
FD Interest Frequency
How often an FD pays interest — monthly/quarterly/annual payout (non-cumulative) for income, or cumulative (compounded, paid at maturity) for the highest maturity value; the rate is usually the same, the difference is reinvestment.
DICGC Deposit Insurance
Deposit insurance from the DICGC (an RBI subsidiary) covering bank deposits up to ₹5 lakh per depositor per bank, including principal and interest; NBFC deposits are not covered.
FD Taxation
FD interest is fully taxable at your slab rate under Income from Other Sources; TDS is 10% (20% without PAN) above the FY2025-26 thresholds; tax-saving FDs give an 80C deduction on the deposit but the interest stays taxable.
Senior Citizen FD
A fixed deposit that pays resident individuals aged 60+ a higher interest rate (commonly about 0.50% more); same DICGC cover and taxation as a regular FD, with extra tax relief.
Premature Withdrawal
Closing or partly withdrawing a fixed deposit before maturity; the bank recalculates interest for the period held and deducts a penalty. Tax-saving FDs are generally locked in.
Recurring Deposit (RD)
A deposit where a fixed amount is paid in every month for a set term at a fixed rate.
NEFT (National Electronic Funds Transfer)
An RBI electronic transfer system that settles transactions and now operates 24x7.
RTGS (Real Time Gross Settlement)
An RBI system for high-value transfers settled individually in real time; 24x7.
IMPS (Immediate Payment Service)
An instant interbank transfer service available 24x7, run by NPCI.
IFSC Code
An 11-character code identifying a specific bank branch in India's payment systems.
Repo Rate
The rate at which the RBI lends to commercial banks; a key policy lever for interest rates.
Compound Interest
Interest calculated on both the principal and previously accumulated interest.
Principal
The original sum borrowed or invested, before interest.