.grd files are sometimes used for geoid model files. A geoid model contains offsets between a geopotential surface and the ellipsoid model of the Earth. GNSS (GPS, GLONASS, Beidou, etc.) natively return heights above the ellipsoid surface. These are not always useful as they do not reflect which direction water will flow 'downhill'.
The geopotential surface of a geoid model is approximately equal to mean sea level as IF there was no topography. I've seen it described as there are tunnels connecting the oceans and allowing the water to freely flow.
Anyway, people often prefer elevations, heights above the geoid or another gravity-related surface as many vertical coordinate reference systems are like NAVD88 (USA), NAP (Netherlands), etc.