Fixed income glossary

Every term defined for the Indian market specifically, including the conventions, tax rules and institutions that only apply here. Use the filter to jump around.

Accrued interest: Interest earned since the last coupon date but not yet paid. Buyers pay it to sellers at settlement; see the accrued interest calculator.
AT1 bond (Additional Tier 1): Perpetual bank bonds that can be written off or skip coupons under stress. The Yes Bank 2020 write-off made the risk famous. Not fixed deposits in any sense.
Basis point (bp): One hundredth of a percent. 25 bps = 0.25%. The natural unit for yield moves.
Benchmark security: The most liquid on-the-run G-sec of a tenor (e.g. 'the 10-year benchmark'), used as the market's reference yield.
Bond ladder: A portfolio of bonds maturing in successive periods, smoothing reinvestment risk and creating scheduled liquidity.
Call option (callable bond): Issuer's right to repay early on set dates. It favours the issuer, so price it on yield-to-call rather than YTM.
Clean price: Quoted bond price excluding accrued interest. What screens show; not what you pay.
Convexity: Curvature of the price-yield relationship. Positive convexity means prices fall less (and rise more) than duration alone predicts.
Coupon: The periodic interest payment, expressed as an annual percentage of face value.
Credit rating: Agency assessment of default risk (AAA highest to D). Ratings are opinions, and they lag events, so treat them as a filter rather than a verdict.
Credit spread: Extra yield over the matching G-sec that compensates for credit risk. Widening spreads = market pricing more risk.
Cum-interest / ex-interest: Whether a trade includes the upcoming coupon. Determined by the record date; accrued interest adjusts accordingly.
Current yield: Annual coupon divided by clean price. Ignores pull-to-par; inferior to YTM for decisions.
Day count convention: Rule for counting days of interest: 30/360 for G-secs, Actual/Actual for Indian corporates, ACT/365 for money markets.
Debenture: Indian term for a corporate bond, typically unsecured (NCD = non-convertible debenture).
Debenture trustee: SEBI-regulated entity that holds security and enforces bondholder rights in listed NCDs.
DICGC insurance: Deposit insurance covering bank deposits up to ₹5 lakh per depositor per bank. Bonds have no equivalent.
Dirty price: Clean price plus accrued interest, which is the amount that settles. Also called invoice price.
Duration (Macaulay): Weighted-average time to receive a bond's cashflows, in years. The horizon-matching number.
Duration (modified): Approximate % price change per 1% yield move. The risk number. Modified = Macaulay ÷ (1 + y/f).
Face value: Principal repaid at maturity, and the base for coupon math. ₹100 for G-secs; ₹1,000 (post-2022 ₹10,000 for some) for many NCDs.
FIMMDA: Fixed Income Money Market and Derivatives Association, which sets Indian market conventions like the G-sec 30/360 day count.
FRSB (Floating Rate Savings Bond): 7-year RBI savings bond paying NSC + 0.35%, reset half-yearly. 8.05% for Jul–Dec 2026.
G-sec: Government of India dated security: a sovereign bond running from 1 to 40 years. The safest rupee asset.
G-spread: A corporate bond's yield minus the interpolated G-sec yield at the same maturity.
Gilt fund: Mutual fund holding G-secs. Convenience and liquidity, with an expense ratio and no fixed maturity.
Information memorandum (IM): The legal offer document of a bond issue: coupon dates, security, covenants, day count. The source of truth.
ISIN: 12-character identifier of a specific security (e.g. IN0020240059). Always compare platforms using the ISIN, not the bond's name.
Ladder (rolling): A bond ladder where maturing rungs are reinvested at the long end, averaging entry yields across rate cycles.
LTCG (bonds): Long-term capital gain: listed bonds held > 12 months, taxed at 12.5% + cess without indexation (FY 2026-27).
Market-linked debenture (MLD): Structured debenture whose payoff references an index. Taxed at slab (Sec 50AA); complexity usually favours the issuer.
MSS / OMO: RBI operations buying and selling G-secs to manage liquidity. They drive a lot of the yield movement between policy meetings.
NCD: Non-convertible debenture: a corporate bond that never converts to equity. Public-issue NCDs list on exchanges.
NDS-OM: RBI's anonymous order-matching system where G-secs trade. Retail Direct users access it for secondary sales.
NSC: National Savings Certificate: a post-office 5-year compounding instrument whose rate anchors the FRSB formula. 7.70% for Jul–Sep 2026.
OBPP: Online Bond Platform Provider, SEBI's framework for platforms selling listed bonds online. Check a platform's registration before transacting.
Par / premium / discount: Trading at, above, or below face value. Discount bonds convert part of the return into lightly-taxed capital gain.
Perpetual bond: No maturity date; issuer may call on set dates. Yield-to-call is the operative number; assume the worst-case path.
Pull to par: A bond's price converging to face value as maturity approaches. It's where the capital gain on a discount bond comes from.
Put option (puttable bond): Bondholder's right to demand early repayment on set dates. Rare in Indian paper, and worth having when rates rise.
PVBP / DV01: Rupee price change for a 1 bp yield move. PVBP × position size = your per-basis-point P&L.
RBI Retail Direct: Free RBI portal for individuals to buy T-bills, G-secs, SDLs and FRSBs at auction with no fees.
Record date: Date on which the registered holder is entitled to the coupon. G-secs pause transfers briefly (shut period) beforehand.
Repo rate: RBI's policy rate, the anchor for all rupee yields. 5.25% as of mid-2026.
RFQ platform: Exchange 'request for quote' venues where OBPP trades in listed bonds are executed and cleared.
SDL: State Development Loan: a state-government bond auctioned by the RBI. The pickup over G-secs moves with state borrowing, and ran about 65–80 bps at July 2026 auctions against 25–40 bps for most of the preceding years.
SGB: Sovereign Gold Bond: gold-linked government paper. New issuance stopped in 2024, and Budget 2026 restricted the redemption tax exemption to original-issue buyers.
STCG (bonds): Short-term capital gain: listed bonds held ≤ 12 months, plus all unlisted bonds. Taxed at slab.
STRIPS: G-sec coupons and principal separated into individual zero-coupon securities. Clean building blocks for ladders and dated goals.
T-bill: Treasury bill: zero-coupon sovereign paper of 91/182/364 days sold at a discount. Auctioned weekly.
TDS Section 193: 10% tax deducted at source on listed-bond interest above ₹10,000/year (FY 2026-27). Form 121 exempts below-taxable-limit investors.
XIRR: Effective annual IRR computed on actual dates. Use it when comparing instruments whose cashflows arrive on different schedules.
Yield curve: Yields plotted across maturities. Upward-sloping is normal; inversions signal expected cuts.
Yield to call (YTC): IRR assuming the issuer calls at the earliest date. For callable/perpetual paper, decide on min(YTM, YTC).
Yield to maturity (YTM): The discount rate that equates a bond's remaining cashflows to its dirty price. The market's headline return measure. See the full YTM guide.
Zero-coupon bond: Pays no coupons; the entire return is discount-to-face. No reinvestment risk, maximum duration per year of maturity.