Financial & Calculator Terms Explained
This page defines commonly used financial and calculator terms you may see across Numlify tools and in general use. Definitions and rules mentioned here are current as of 2026.
Fixed Deposit (FD)
A Fixed Deposit (FD) is a financial instrument offered by banks where a lump sum is invested for a fixed tenure at a predetermined interest rate. Interest is paid at maturity or at intervals (monthly/quarterly), depending on the scheme; in India, FDs of 6 months or more typically compound quarterly.
It is commonly used for safe savings and predictable returns. You can estimate maturity and interest using an FD calculator.
Recurring Deposit (RD)
A Recurring Deposit (RD) is a savings product where a fixed amount is deposited every month for a fixed tenure; interest is compounded quarterly and paid at maturity. In India, banks and the post office offer RDs.
It is commonly used for regular savings when you do not have a lump sum. You can estimate maturity using an RD calculator.
Simple Interest
Simple interest is interest calculated only on the principal amount for the entire period; the formula is Principal × Rate × Time. It does not add previously earned interest back to the principal.
It is commonly used for short-term loans and some fixed-income products (e.g. FDs below 6 months in India). You can compute interest and total amount using a simple interest calculator.
Compound Interest
Compound interest is interest calculated on the principal plus any interest already earned; each period the base grows, so you earn interest on interest. The formula uses principal, rate, compounding frequency, and time.
It is commonly used for long-term investments and most bank FDs and RDs. You can see how your money grows using a compound interest calculator.
EMI
EMI (Equated Monthly Instalment) is the fixed amount you pay each month towards a loan; it includes both principal and interest so the loan is fully repaid by the end of the tenure. EMI depends on loan amount, interest rate, and tenure.
It is commonly used for home loans, car loans, and personal loans. You can compare loan options using an EMI calculator.
SIP
SIP (Systematic Investment Plan) is a method of investing a fixed amount at regular intervals (usually monthly) in mutual funds. Returns depend on fund performance and investment horizon; it reduces timing risk and encourages discipline.
It is commonly used for long-term wealth building and rupee cost averaging. You can estimate returns using a SIP calculator.
CAGR
CAGR (Compound Annual Growth Rate) is the average yearly growth rate of an investment over a given period, assuming growth is compounded. It smooths out volatility and does not show actual year-by-year returns.
It is commonly used to compare mutual funds, stocks, FDs, or business revenue over the same period. You can compute CAGR from initial value, final value, and years using a CAGR calculator.
HRA
HRA (House Rent Allowance) is a salary component given to employees to meet rental expenses. A portion can be claimed as tax exemption if you pay rent; the exempt amount is the least of three prescribed limits (based on salary, actual rent, and city).
It is commonly used to reduce taxable salary for salaried individuals who pay rent. You can estimate exempt HRA using an HRA calculator.
Gratuity
Gratuity is a lump sum paid by an employer to an employee as a reward for long service, payable on resignation, retirement, or death after at least five years of service. In India, the amount is based on last drawn salary (basic + DA) and years of service under the Payment of Gratuity Act.
It is commonly used as a retirement or exit benefit. You can estimate the amount using a gratuity calculator.
PPF
PPF (Public Provident Fund) is a government-backed savings scheme in India with a 15-year tenure (extendable in blocks of 5 years). It offers tax-free interest and EEE status: contributions, interest, and maturity are tax-exempt; annual deposit is capped (e.g. up to ₹1.5 lakh per financial year).
It is commonly used for long-term tax-free savings and retirement planning. You can project maturity using a PPF calculator.
NPS
NPS (National Pension System) is a voluntary retirement savings scheme in India regulated by PFRDA; you invest in a mix of equity, debt, and government securities. At maturity, a portion of the corpus can be withdrawn and the rest must be used to buy an annuity. It offers tax benefits under the Income Tax Act.
It is commonly used for retirement corpus building with market-linked returns. You can estimate corpus and pension using an NPS calculator.
Income Tax
Income tax is a direct tax levied by the government on income (salary, business, capital gains, etc.) in a financial year. In India, individuals are taxed under slabs (e.g. FY 2025-26 / AY 2026-27); deductions and rebates reduce taxable income before tax is computed.
It is commonly used to determine tax liability under the Old or New regime. You can estimate tax using an income tax calculator.
GST
GST (Goods and Services Tax) is an indirect tax on the supply of goods and services in India; it replaced many earlier central and state taxes. GST is charged at different rates (e.g. 5%, 12%, 18%, 28%) depending on the product or service. Businesses collect GST from customers and pay it after claiming input tax credit.
It is commonly used for pricing, invoicing, and compliance. You can add or remove GST from a price using a GST calculator.
Salary (CTC vs In-hand)
CTC (Cost to Company) is the total amount an employer spends on an employee in a year, including basic salary, allowances, employer PF, bonus, and other benefits. In-hand salary is the amount received after deducting tax, employee PF, and other deductions; the gap is due to these deductions and how components are structured.
It is commonly used to understand take-home pay and salary structure. You can break down CTC and see in-hand using a salary calculator.
Percentage
Percentage is a number expressed as a fraction of 100, written with the symbol % (e.g. 25% means 25 per 100). It is computed as (part ÷ whole) × 100 or as a rate applied to a base.
It is commonly used for rates, discounts, marks, interest, GST, and everyday comparisons. You can find X% of Y, or what percent X is of Y, using a percentage calculator.
BMI
BMI (Body Mass Index) is a value derived from weight and height (weight in kg ÷ height in metres²) used to categorise adults as underweight, normal weight, overweight, or obese. It does not distinguish muscle from fat and is a screening tool, not a diagnostic.
It is commonly used for quick assessment of weight category. You can get your BMI and category using a BMI calculator.
Age (Chronological Age)
Chronological age is the time elapsed since date of birth, usually expressed in years, months, and days. It is distinct from biological or functional age.
It is commonly used for eligibility, legal purposes, retirement, and insurance. You can compute age from birth date to a given date using an age calculator.
Date Difference
Date difference is the period or span between two calendar dates, usually expressed in days, months, and years. The result depends on whether you count calendar days and how months and years are normalised; leap years are typically included.
It is commonly used for tenure, project timelines, subscriptions, and milestones. You can get the exact span between two dates using a date difference calculator.