Financial Glossary
Demystifying the complex world of finance, one term at a time.
The total percentage change in an investment's value, without annualising.
The process of repaying a loan through fixed instalments that cover both interest and principal.
A contract that converts a lump sum into a guaranteed income stream.
Assets Under Management is the total market value of the investments a fund or manager holds.
Compound Annual Growth Rate represents the mean annual growth rate of an investment over a specified period longer than one year.
The share of claims an insurer settled out of all claims it received in a financial year.
A fixed share of every admissible claim that the policyholder pays out of pocket.
An agency assessment of an issuer's ability to service its debt on time.
A three-digit summary of your repayment history, usually on a 300-900 scale.
The share of your available credit limit that you are currently using.
A mutual fund plan bought directly from the AMC, without a distributor commission built into the cost.
Liquid savings kept aside to cover unplanned expenses or loss of income.
Equated Monthly Instalment is the fixed monthly payment that repays a loan over its tenure.
A fee deducted when mutual fund units are redeemed before a defined holding period.
The annual fee, as a percentage of assets, that a mutual fund or ETF charges its unit holders.
Fixed Obligation to Income Ratio is the share of monthly income already committed to debt repayment.
A fee added by the card issuer on transactions billed in a foreign currency.
A window after policy issuance in which you can cancel and get a refund of premium.
A bureau check triggered when you formally apply for credit.
The tax-exempt portion of house rent allowance received from an employer.
Insured Declared Value is the current market value of a vehicle, and the maximum motor claim payout.
Claims paid by a general insurer as a percentage of the net premium it earned.
Adjusting an asset's purchase cost for inflation before computing capital gains.
The rate at which the general price level of goods and services rises.
Gains on assets held beyond the holding period that qualifies them as long-term.
Loan to Value is the loan amount expressed as a percentage of the asset's assessed value.
Net Asset Value is the per-unit market value of the securities held by a mutual fund scheme.
A benefit given for claim-free policy years, as a premium discount or extra cover.
The National Pension System is a market-linked retirement account regulated by PFRDA.
A condition diagnosed or treated before a health policy started.
A fee for repaying a loan, fully or partly, ahead of schedule.
The return on an investment after adjusting for inflation.
Interest charged only on the outstanding principal, which falls with every repayment.
The rate at which the RBI lends short-term funds to commercial banks.
Credit you can reuse as you repay, such as a credit card or overdraft line.
A cap on the daily hospital room charge a health policy will reimburse.
A deduction of up to Rs 1.5 lakh a year available under the old tax regime.
Gains on assets sold within the short-term holding window.
A Systematic Investment Plan invests a fixed amount in a scheme at regular intervals.
A SIP where the instalment increases by a fixed percentage or amount every year.
A Systematic Withdrawal Plan redeems a fixed amount from a scheme at regular intervals.
Motor insurance that pays for injury or property damage you cause to someone else.
The time a health policy must run before certain conditions or treatments become claimable.
Extended Internal Rate of Return calculates returns when money is invested or withdrawn at multiple points in time.
The income generated by an investment, expressed as a percentage of its price.
The total annualised return from holding a bond until it matures.