Reference
Glossary
The 66 key terms this course uses, in one place. Each links to the full entry in the site glossary, with an Indian example.
Asset Allocation
How you split money between shares, bonds, gold and cash.
Base Effect
When this year’s number looks dramatic only because last year’s was unusual.
Bear Market
When prices keep falling and everyone remembers risk exists.
Cash Reserve Ratio (CRR)
The share of deposits banks must keep with the RBI, earning nothing.
Collateral
Something valuable a borrower pledges, which the lender can take if the loan isn’t repaid.
Compound Interest
Interest that earns interest. The most powerful idea in personal finance.
Core Inflation
Inflation with the volatile bits, food and fuel, taken out.
Credit Card
A short-term loan in your pocket, interest-free if you pay in full on time.
Credit Score
A three-digit number that tells lenders how reliably you repay.
Cryptocurrency
Digital tokens recorded on blockchains, like Bitcoin. Highly volatile.
Demat Account
The digital locker where your shares actually live.
Deposit Insurance
Government-backed protection for bank deposits, up to ₹5 lakh.
Derivatives
Contracts whose value depends on something else, like an index or a share.
Digital Rupee (e₹)
Cash, issued by the RBI, but in digital form.
Direct Tax
A tax paid directly to the government on income or profits.
Diversification
Not putting all your money on one horse, even when that horse looks great today.
Emergency Fund
Money set aside for surprises, so you never have to borrow in a crisis.
EMI (Equated Monthly Instalment)
The fixed monthly payment on a loan, mixing interest and repayment.
ETF (Exchange-Traded Fund)
A fund that trades on the stock exchange like a share.
Expense Ratio
The annual fee a mutual fund charges, as a share of your money.
Fixed Deposit (FD)
Money locked with a bank for a set time at a guaranteed rate.
Food Inflation
How fast the cost of the family’s food basket is rising.
Gold
Half investment, half tradition, and priced differently in India than anywhere else.
Gold ETF
A way to own gold through your demat account, without holding the metal.
GST (Goods and Services Tax)
A single tax on most goods and services, shared between the Centre and states.
Health Insurance
Cover that pays hospital bills so a medical emergency doesn’t wipe out savings.
Household Consumption Survey
A nationwide survey of what Indian families actually spend money on.
Income Tax
The tax on what individuals earn, collected at rising rates.
Index Fund
A fund that simply copies a market index, like the Nifty 50.
Indirect Tax
A tax built into the price of what you buy, paid by everyone at the same rate.
Inflation (CPI)
Why the same snack costs more this year than last year.
Interest Rate
The cost of borrowing money, or the reward for saving it. The same number does both jobs.
IPO
How a private company sells a piece of itself to anyone with a demat account.
KYC (Know Your Customer)
The identity check every bank, broker and wallet must do before serving you.
Liquidity
How easily money, or an asset, can be turned into spendable cash.
Market Correction
A fall of about 10% from a recent peak.
Mutual Fund
A pool of money from many investors, managed by professionals.
NAV (Net Asset Value)
The price of one unit of a mutual fund.
NEFT, RTGS and IMPS
The three older ways banks move money between accounts.
Nifty 50
India’s 50 largest listed companies, tracked as one number.
NPS (National Pension System)
A government-regulated retirement scheme that invests in shares and bonds.
Opportunity Cost
The value of the best thing you gave up to do something else.
P/E Ratio
How many years of current profits you are paying for when you buy a share.
Ponzi Scheme
A fraud that pays old investors with new investors’ money.
PPF (Public Provident Fund)
A government-backed 15-year savings scheme with tax-free returns.
Provident Fund (EPF)
A retirement savings account funded by you and your employer every month.
Purchasing Power
How much your money can actually buy.
Real Interest Rate
The interest you earn after inflation has taken its share.
Repo Rate
The rate the RBI charges banks. Move it, and every loan in the country feels it.
Reserve Bank of India (RBI)
India’s central bank. It sets interest rates, manages the rupee and regulates banks.
Rule of 72
A shortcut to work out how fast money doubles.
Rupee Cost Averaging
Buying more units when prices are low, fewer when high, by investing the same amount regularly.
Savings Account
An everyday bank account that pays a little interest and lets you withdraw any time.
SEBI
The regulator that writes the rules for India’s securities markets.
Sensex
The BSE’s own 30-company index, and the Nifty’s older cousin.
SIP (Systematic Investment Plan)
Investing a fixed amount in a mutual fund every month, automatically.
Sovereign Gold Bond (SGB)
Government bonds linked to gold, which also paid interest.
Stock (Share)
A small slice of ownership in a company.
Take-Home Pay
The salary that actually lands in your bank account each month.
Tax Regime (New vs Old)
India’s two income tax systems: lower rates with few deductions, or higher rates with many.
Tax Slab
An income band taxed at a particular rate.
Tax Year
The twelve months in which income is earned and taxed. Replaced “assessment year” in 2026.
TDS (Tax Deducted at Source)
Tax taken out of a payment before it reaches you.
Term Insurance
Pure life insurance: a large payout if you die, nothing if you don’t.
The 50-30-20 Budget
Half for needs, 30% for wants, 20% for savings. A simple starting rule.
UPI (Unified Payments Interface)
India’s instant phone-to-phone payment system. Free, fast and everywhere.