The money glossary, in plain English
Every term you will meet while learning about money and investing, written for a normal human. No jargon hiding behind more jargon. Search it, or just scroll. Prefer a full walkthrough? Our money guides cover the same ideas step by step.
80C (Section 80C)
The part of India's income tax rules that lets you cut your taxable income by up to ₹1.5 lakh a year by putting money into things like ELSS, PPF, EPF, life insurance or a tax-saving FD. The most-used tax break for salaried Indians.
Asset allocation
How you split your money across different types of investments. It is the single biggest driver of your overall risk and return.
Asset
Anything you own that has value and can earn money or grow, like cash, stocks, property or gold.
Bear market
A long stretch when prices fall broadly, usually by 20 percent or more. The opposite of a bull market. You can stress-test a plan against one here.
Bond
A loan you make to a government or company. They pay you regular interest and return your money at the end. Generally steadier than stocks.
Bull market
A long stretch when prices rise broadly and confidence is high. The opposite of a bear market.
Capital gain
The profit you make when you sell something for more than you paid for it.
Capital gains tax (LTCG and STCG)
The tax on the profit when you sell shares, mutual funds or property. Hold for longer and you usually pay the lower long-term rate (LTCG); sell quickly and you pay the higher short-term rate (STCG).
Compounding
When your gains start earning gains of their own. The longer you stay invested, the more powerful it becomes. See it in action on the calculator.
Cryptocurrency
A digital asset that runs on a decentralised network. Known for very high potential returns and very large swings. An honest look here.
Crore
One crore is ten million (₹1 crore = ₹1,00,00,000). With lakh, it is how Indians actually say large amounts. ₹1 crore is the same number as ₹10 million, but nobody here says it the second way.
Demat account
A digital account that holds your shares and mutual funds electronically, the way a bank account holds money. You need one to buy and sell shares in India.
Diversification
Spreading money across different assets so one bad result does less damage. Often called the only free lunch in investing.
Dividend
A share of a company's profit paid out to shareholders, usually in cash.
Dollar-cost averaging
Investing a fixed amount on a regular schedule, whatever the price. It removes the pressure of trying to time the market.
ELSS
Equity Linked Savings Scheme. A tax-saving mutual fund that also cuts your tax under Section 80C. It has the shortest lock-in of the 80C options, just three years, and unlike a PPF or FD it invests in shares.
Emergency fund
Cash set aside for surprises, usually three to six months of expenses. It stops you having to sell investments at a bad time.
Equity
Ownership. In stocks it means owning a slice of a company. In property it means the part of the value you actually own, not the mortgage.
ETF (exchange-traded fund)
A basket of many investments you can buy in one trade, like a share. A low-cost way to own a whole market at once.
Fixed deposit (FD)
Money locked with a bank for a set term at a fixed interest rate. Safe and predictable, but the returns often barely beat inflation, so it suits money you cannot afford to risk rather than long-term growth.
Index fund
A fund that simply tracks a whole market index rather than trying to beat it. Low cost, and the long-run benchmark most professionals are measured against. More on this here.
Inflation
The slow rise in prices over time, which quietly reduces what your money can buy. Beating it is a core reason to invest.
Interest
The cost of borrowing money, or the reward for lending or saving it, shown as a percentage.
Lakh
One lakh is one hundred thousand (₹1 lakh = ₹1,00,000). With crore, it is the everyday way Indians count money. ₹5 lakh is the same as ₹500,000, just said the way people here actually speak.
Leverage
Using borrowed money to control a larger asset. It magnifies gains and losses alike. Most common in property. See the effect on a property here.
Liquidity
How quickly you can turn something into cash without losing value. Cash is highly liquid, property is not.
Market capitalisation
The total value of a company's shares. Price per share times the number of shares.
Mutual fund (MF)
A professionally managed pool of money from many investors, priced once a day at its net value. In India most people invest in one through a SIP, a fixed amount every month.
Net worth
Everything you own minus everything you owe. The single clearest measure of your financial position. Check your financial health here.
Nifty 50 and Sensex
India's two main stock market benchmarks. The Sensex tracks 30 large companies on the BSE; the Nifty 50 tracks 50 on the NSE. When people ask how the market is doing, they mean these.
NPS
National Pension System. A low-cost, government-backed retirement account. It gives an extra tax break beyond 80C and pays out from age 60.
Passive income
Money that comes in without active work, like rent, dividends or interest. Ways to build it here.
Portfolio
The full collection of investments you hold.
PPF
Public Provident Fund. A 15-year government savings scheme with tax-free interest, popular for safe long-term and retirement money. It counts towards your 80C limit.
Principal
The original amount of money you invest or borrow, before any interest or growth.
Recession
A period when the economy shrinks for a sustained stretch. It often, but not always, overlaps with falling markets.
REIT (real estate investment trust)
A company that owns income-producing property, which you can buy like a share. Property-style income without buying a building.
Retirement corpus
The total pot of money you aim to build for retirement. In India this is usually called your retirement corpus, and a common goal is enough to live off without running out.
Return (ROI)
What you earn on an investment, usually shown as a percentage of what you put in. Work out a property's ROI here.
Risk tolerance
How much ups and downs you can handle, financially and emotionally, without panic-selling. Find yours here.
SIP
Systematic Investment Plan. A fixed amount invested automatically every month into a mutual fund. The simplest and most popular way Indians build wealth, and a form of buying steadily whatever the price.
Stock (share)
A small piece of ownership in a company. Its price moves with the company's fortunes and the wider market. How to think about them here.
Volatility
How much and how fast a price moves up and down. Higher volatility means a bumpier ride. See a range of outcomes here.
Yield
The annual income an investment pays, as a percentage of its price. Common for property, bonds and dividend stocks. Calculate a rental yield here.
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