Financial Terms Glossary

Common financial terms explained in plain English. No jargon, just clear definitions you can actually understand and use.

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Anything you own that has monetary value. Examples: stocks, real estate, gold, FDs, PPF. Assets generate income or appreciate over time.

Total market value of investments managed by a mutual fund or financial institution. Higher AUM doesn't always mean better performance.

Average annual growth rate of an investment over a specific period. If ₹1 lakh becomes ₹2 lakh in 7 years, CAGR is ~10%.

Percentage of people who click on a link after seeing it. Important metric for measuring ad and content performance.

Your credit score ranging from 300-900. Above 750 is considered good for getting loans at best interest rates.

Account that holds your stocks, bonds, and securities in electronic form. Required to trade in stock market in India.

Company's profit distributed to shareholders. TCS pays ~₹95-100/share annually as dividend.

Spreading investments across different assets to reduce risk. Don't put all eggs in one basket.

Fixed monthly payment toward a loan. Includes both principal and interest. Home loan EMI of ₹50K means ₹6L annual payment.

Annual fee charged by mutual funds, expressed as percentage of AUM. Lower is better. 0.5% means ₹500 annual fee on ₹1 lakh investment.

6-12 months of expenses saved in liquid form. Safety net for job loss, medical emergencies, or unexpected costs.

Low-risk investment where you deposit money with a bank for fixed tenure at fixed interest rate. SBI offers ~7% for 5-year FD.

Movement focused on saving aggressively and investing to retire before traditional retirement age (usually 40-50 instead of 60).

Price of one unit of mutual fund. Calculated daily. If NAV is ₹50, buying 100 units costs ₹5,000.

Index of top 50 companies listed on NSE. Represents ~65% of Indian stock market. Investing in Nifty 50 index fund gives diversified exposure.

Stock price divided by earnings per share. TCS P/E of 22 means investors pay ₹22 for ₹1 of annual profit. Lower is generally cheaper.

Government-backed 15-year savings scheme. Tax-free returns (~7.1% currently). Lock-in period makes it unsuitable for emergency funds.

Investing fixed amount monthly in mutual funds. ₹5,000/month SIP for 20 years at 12% CAGR = ₹49 lakh corpus.

Government-issued gold bonds. Better than physical gold: 2.5% annual interest, no storage issues, tax-free if held 8 years.

Tax deduction up to ₹1.5 lakh on investments like PPF, ELSS, life insurance, home loan principal. Saves ~₹46,800 tax in 30% bracket.

We're constantly adding more financial terms. Browse our blog for in-depth explanations with real examples.