Finance Lexicon.

The process of spreading out a loan into a series of fixed payments over time. While the payments are equal, the portion going to interest starts high and decreases over the life of the loan.

An investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance, and investment horizon.

A condition in which securities prices fall 20% or more from recent highs amid widespread pessimism and negative investor sentiment.

A financial market of a group of securities in which prices are rising or are expected to rise.

Interest calculated on the principal balance plus the accumulated interest from previous periods. It is essentially 'interest on interest'.

A measure that examines the weighted average of prices of a basket of consumer goods and services. It is one of the most frequently used statistics for identifying periods of inflation or deflation.

A personal finance measure that compares an individual's monthly debt payment to their monthly gross income.

A financial ratio that tells you the percentage of a company's share price that it pays out in dividends each year.

An amount of money set aside to cover large, unexpected expenses or a loss of income. It acts as a financial safety net.

A fixed payment amount made by a borrower to a lender at a specified date each calendar month.

The annual fee that all funds or ETFs charge their shareholders. It expresses the percentage of assets used to pay for administrative and other operating expenses.

A lifestyle movement whose goal is financial independence and retiring much earlier than traditional budgets or retirement plans allow.

A fixed deposit account for NRIs to park their foreign currency in India without currency conversion risk.

A sequence of numbers where each term after the first is found by multiplying the previous one by a fixed, non-zero number called the common ratio. Used for calculating future values.

A legal entity in Indian tax law that can be used for tax planning and holding ancestral property.

A type of mutual fund or ETF with a portfolio constructed to match or track the components of a financial market index, such as the Nifty 50.

The rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power of currency is falling.

Profits from the sale of an asset held for a specific period (usually more than 1 or 2 years in India). Taxed at a preferential rate.

A voluntary, defined contribution retirement savings scheme in India designed to enable the subscribers to make optimum decisions regarding their future.

A long-term savings-cum-tax-saving instrument in India with a 15-year lock-in period and tax-free interest.

The process of realigning the weightings of a portfolio of assets to maintain the original or desired level of asset allocation or risk.

A monetary policy used by central banks to decrease the amount of liquidity or money supply in the economy.

The annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external effects.

Government securities denominated in grams of gold. They are substitutes for holding physical gold.

A facility offered by mutual funds to investors to invest in a disciplined manner at regular intervals.

Profit made on an asset held for a short duration (less than 12-36 months depending on asset type). Usually taxed at higher rates.

A facility that allows an investor to withdraw a fixed amount of money from their mutual fund at regular intervals.

Bonds issued by government-backed entities where the interest earned is exempt from income tax.

The actual rate of return of an investment or a pool of investments over a given evaluation period, including interest, capital gains, dividends, and distributions.

A product that provides the benefits of both insurance and investment in a single plan.

A statistical measure of the dispersion of returns for a given security or market index. Often used as a proxy for risk.

The total return anticipated on a bond if the bond is held until it matures.

A debt security that doesn't pay interest but is instead traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value.