Jargon

The jargon, decoded.

The finance terms that actually matter — defined in plain English. Search a word, or browse by topic.

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Core Personal Finance

Asset: Anything of value you own — cash, gold, land, shares, even the bike you could sell tomorrow. If you can turn it into money, it's an asset.
Liability: The opposite of an asset: money you owe others. Your home loan, credit card bill, or the phone you're still paying EMIs on are all liabilities.
Net Worth: Everything you own minus everything you owe. ₹2L in stuff but a ₹1.5L loan means your net worth is ₹50,000 — the real number, not your salary.
Inflation: Why the same ₹100 buys less every year. The idli that cost your grandfather ₹1 now costs ₹10 — so money left sitting idle quietly loses value.
Emergency Fund: 3–6 months of expenses kept aside only for real emergencies — a job loss, a hospital bill, a sudden repair. Your financial airbag, so one bad month doesn't wreck you.
Budgeting: A simple plan for where your salary goes before it disappears. You tell your money where to go, instead of reaching month-end wondering where it went.
Interest Rate: The price of money — what you pay to borrow it, or earn to save it. A 12% loan costs ₹12 a year on every ₹100 borrowed. You want it low when borrowing, high when saving.
Fixed DepositFD: Money locked with a bank for a fixed period at a fixed interest rate. Safer than the market but usually gives lower returns.
Recurring DepositRD: You deposit a fixed amount every month for a set period and earn interest on it. Good for building a savings habit.
Savings Account: A bank account for your everyday money that pays a small interest, usually around 2.5 to 4 percent a year.
UPIUnified Payments Interface: India's instant mobile payment system that lets you send money between banks using apps like GPay or PhonePe.
NEFTNational Electronic Funds Transfer: A way to transfer money between banks in India. It settles in batches through the day rather than instantly.
RTGSReal Time Gross Settlement: A bank transfer for large amounts, ₹2 lakh and above, that settles one to one in real time.
EMIEquated Monthly Installment: The fixed amount you pay every month to repay a loan. Each EMI covers part of the principal plus interest.
Principal: The original amount of money you borrow or invest, before any interest is added on top.
Credit Score: A three digit number, 300 to 900 in India, that shows how reliably you repay debt. A higher score means easier and cheaper loans.
CIBIL Score: The most widely used credit score in India, run by TransUnion CIBIL. A score of 750 and above is considered good.
Collateral: An asset like property or gold that you pledge to a lender. If you fail to repay, the lender can take it.
Secured Loan: A loan backed by collateral, like a home or car loan. Interest is usually lower because the lender takes less risk.
Unsecured Loan: A loan with no collateral behind it, like a personal loan or credit card. Interest rates are higher to cover the risk.
Credit Card: A card that lets you spend on borrowed money up to a limit. It is interest free if you repay the full bill by the due date.
Credit Limit: The maximum amount you are allowed to spend on a credit card.
Minimum Due: The smallest amount you must pay on a credit card bill to avoid a late fee. Paying only this piles up heavy interest on the rest.
Home Loan: A long term loan to buy or build a house, usually repaid over 10 to 30 years and secured against the property.
Down Payment: The part of a purchase you pay upfront from your own money, with a loan covering the rest.
Default: Failing to repay a loan or debt on time. It seriously damages your credit score and future borrowing.
Term Insurance: Pure life cover that pays your family a large sum if you die during the policy term. There is no payout if you survive it.
Health Insurance: A policy that covers your hospital and medical bills, protecting your savings from big treatment costs.
Premium: The amount you pay, monthly or yearly, to keep an insurance policy active.
Sum Assured: The guaranteed amount an insurer pays out when a valid claim is made.
ULIPUnit Linked Insurance Plan: A product that mixes insurance and investment in one. It is often costly, so many advisors suggest keeping insurance and investing separate.
GSTGoods and Services Tax: The single indirect tax added to most goods and services you buy in India.
Income Tax: The tax you pay to the government on the money you earn in a year.
TDSTax Deducted at Source: Tax cut directly from your income, like salary or interest, before it reaches you and paid to the government on your behalf.
Section 80C: A part of India's tax law that lets you cut up to ₹1.5 lakh from your taxable income by investing in things like PPF, ELSS, or life insurance.
ITRIncome Tax Return: The yearly form you file to report your income and the taxes you paid to the government.
PANPermanent Account Number: A ten character ID issued by the tax department, required for most big financial transactions in India.
Capital Gains: The profit you make when you sell an asset like shares, gold, or property for more than you paid for it.
PPFPublic Provident Fund: A government savings scheme with a 15 year lock in, tax free returns, and full safety of your money.
EPFEmployees' Provident Fund: A retirement fund where you and your employer each put in a slice of your salary every month.
NPSNational Pension System: A government backed retirement scheme where you invest regularly and receive a pension after the age of 60.
Gratuity: A lump sum your employer pays you for long service, usually after you complete five years with the company.
Liquidity: How quickly you can turn an asset into cash without losing value. Cash is the most liquid, property is the least.

Investment Fundamentals

Equity: Ownership in a company, sliced into shares. Buy one share of TCS and you own a tiny piece of it — its profits and its growth become partly yours.
Mutual Funds: Thousands of people pool their money and a professional invests it across many stocks and bonds. You get a ready-made basket without having to pick stocks yourself.
SIPSystematic Investment Plan: Investing a fixed amount every month on autopilot — say ₹500 on the 1st into a mutual fund. Like a recurring deposit, but for wealth. Small, boring, and how most middle-class Indians actually get rich.
Demat Account: A digital locker that holds your shares. Just as your bank account stores cash, your demat account stores the stocks you buy.
Portfolio: All your investments seen together — stocks, mutual funds, gold, FDs. It's your money's team; you want a mix that still wins when one player has a bad day.
Diversification: Not putting all your money in one place. Spread it across different investments so a single crash can't sink you — the money version of not keeping all your eggs in one basket.
Compound Interest: When your interest starts earning its own interest. Your money makes money, and that money makes more — slow at first, then explosive. Einstein reportedly called it the 8th wonder of the world.
NAVNet Asset Value: The per unit price of a mutual fund, calculated at the end of each trading day.
Expense Ratio: The yearly fee a mutual fund charges to manage your money, shown as a percentage of the amount you invested.
Exit Load: A small fee some mutual funds charge if you withdraw within a set period, meant to discourage early exits.
ELSSEquity Linked Savings Scheme: A tax saving mutual fund with a three year lock in that also qualifies for the Section 80C deduction.
Index Fund: A mutual fund that simply copies an index like the Nifty 50, giving you low cost, market matching returns.
ETFExchange Traded Fund: A fund that holds a basket of assets but trades on the stock exchange like a single share.
Large Cap: The biggest and most established companies by market value. Generally steadier but slower growing.
Mid Cap: Medium sized companies that carry more risk than large caps but offer more room to grow.
Small Cap: Smaller companies with high growth potential and high risk to match.
Debt Fund: A mutual fund that invests in bonds and other fixed income instruments. Lower risk than equity funds.
Liquid Fund: A low risk debt fund for parking money for a few days to a few months, often used in place of a savings account.
NFONew Fund Offer: The first launch of a new mutual fund, when units are usually offered at ₹10 each.
AUMAssets Under Management: The total pool of money a fund or manager is handling on behalf of all its investors.
SWPSystematic Withdrawal Plan: A plan to withdraw a fixed amount from a mutual fund at regular intervals, often used for retirement income.
STPSystematic Transfer Plan: Moving money gradually from one mutual fund into another at set intervals.
Lump Sum: Investing a large amount all at once, rather than spreading it out through a SIP.
Asset Allocation: How you split your money across equity, debt, gold, and cash to balance risk and return.
Rebalancing: Periodically adjusting your portfolio back to your target mix after some assets grow faster than others.
Risk Appetite: How much loss you are willing and able to stomach in the hope of higher returns.
Rupee Cost Averaging: Investing a fixed amount regularly so you buy more units when prices are low and fewer when high, smoothing your average cost.
Bond: A loan you give to a company or government that pays you fixed interest and returns your money at maturity.
Fixed Income: Investments that pay predictable, steady returns, like bonds and fixed deposits.
Yield: The return an investment generates, usually shown as a yearly percentage.
Maturity: The date when an investment like a bond or fixed deposit ends and your money is returned.
Gold ETF: A fund that tracks the price of gold and trades on the exchange, letting you own gold without holding it physically.
Sovereign Gold BondSGB: A government bond priced on gold that also pays you extra interest. A paper way to invest in gold.
REITReal Estate Investment Trust: A company that owns rent earning property and lets you invest in real estate through the stock exchange.
Nominee: The person you name to receive your investment or account if you pass away.
CAGRCompound Annual Growth Rate: The smoothed average yearly return of an investment over several years.
Absolute Return: The total gain or loss on an investment, shown as a plain percentage without adjusting for how long you held it.
Time Horizon: How long you plan to keep your money invested before you need it back.
Fund Manager: The professional who decides where a mutual fund's money is invested.

Stock Market Basics

IPOInitial Public Offering: The first time a private company opens its shares to the public to raise money — like Zomato or LIC did. It's the day ordinary people can finally buy in.
Bull Market: When prices keep climbing and everyone's confident — the market charging ahead like a bull with its horns up. Good times, though the crowd often turns greedy here.
Bear Market: When prices keep falling and fear takes over — the market swiping down like a bear's paw. Scary for most, but where patient investors quietly buy good things cheap.
Market CapMarket Capitalization: A company's full price tag on the market — share price times total shares. It's how you tell a giant like Reliance from a tiny startup, not the share price alone.
Dividend: A share of a company's profit paid back to you for owning its stock — usually as cash. Money that lands in your account just for holding, without selling anything.
ROIReturn on Investment: How much you gained versus what you put in. Put ₹100, get back ₹120 → a 20% ROI. It's the scoreboard that lets you compare any two investments fairly.
Nifty 50: India's benchmark index that tracks the 50 biggest companies listed on the NSE.
Sensex: The BSE's benchmark index that tracks 30 large, established Indian companies.
NSENational Stock Exchange: India's largest stock exchange and the home of the Nifty index.
BSEBombay Stock Exchange: Asia's oldest stock exchange, based in Mumbai, and the home of the Sensex.
SEBISecurities and Exchange Board of India: The regulator that oversees and polices India's stock markets to protect investors.
Share: A single unit of ownership in a company.
Stock Broker: A licensed middleman or app, like Zerodha or Groww, through which you buy and sell shares.
Brokerage: The fee a broker charges for carrying out your trades.
Trading: Buying and selling shares over short periods to profit from price moves, rather than holding for years.
Intraday Trading: Buying and selling the same stock within a single trading day.
Delivery: Buying shares and holding them in your demat account instead of selling on the same day.
Volume: The number of shares traded in a stock over a given period, a sign of how active it is.
Volatility: How sharply and quickly a stock's price swings up and down.
Blue Chip: Shares of large, financially strong, well known companies seen as relatively safe.
Penny Stock: A very low priced, high risk share of a small company.
P/E RatioPrice to Earnings: A stock's price divided by its earnings per share. It shows how expensive the stock is compared to its profit.
EPSEarnings Per Share: A company's profit divided by its number of shares, a key measure of how profitable it is per share.
Face Value: The original nominal value of a share set by the company, often ₹1 or ₹10.
Book Value: A company's net worth, its assets minus liabilities, divided by the number of shares.
52-Week High/Low: The highest and lowest price a stock has touched over the past year.
Circuit Breaker: An automatic halt on trading when a stock or index moves too sharply in a single day.
Stop Loss: An order to automatically sell a stock if it falls to a set price, capping your loss.
Short Selling: Selling shares you do not own, hoping to buy them back cheaper later and pocket the difference if the price falls.
Futures: A contract to buy or sell an asset at a fixed price on a set future date.
Options: A contract giving you the right, but not the obligation, to buy or sell an asset at a set price by a set date.
Derivatives: Financial contracts like futures and options whose value comes from an underlying asset.
F&OFutures and Options: The derivatives segment of the market. It is high risk and mostly suited to experienced traders.
FIIForeign Institutional Investor: Big foreign investors whose buying and selling can swing Indian markets.
DIIDomestic Institutional Investor: Large Indian investors like mutual funds and insurers that trade in the market.
Bonus Share: Extra free shares a company gives its existing shareholders out of its profits.
Stock Split: Dividing each share into more shares to lower the price and improve affordability, without changing the total value.
Buyback: When a company buys its own shares back from the market, often to return spare cash to shareholders.