Every word
your bank assumed
you knew.
Short, useful definitions for the terms that show up on your statements, your forms, and your cousin’s WhatsApp tip.
- Aadhaar Linking
Linking your 12-digit Aadhaar number to PAN, bank accounts, and mutual fund folios.
- AMC (Asset Management Company)
The SEBI-registered entity that runs mutual fund schemes.
- AMFI
The Association of Mutual Funds in India, the industry body for AMCs.
- Annuity
A contract where you pay a lump sum to an insurer and receive periodic income for life.
- Beneficiary
The person legally entitled to a benefit, distinct from a nominee.
- CAGR
Compound Annual Growth Rate, the smoothed annual return between two dates.
- ETF (Exchange Traded Fund)
A mutual fund that trades on an exchange like a stock, throughout the day.
- Exit Load
A fee charged by some mutual funds if you redeem within a specified window.
- Expense Ratio
The annual fee a mutual fund charges, expressed as a percentage of assets.
- FPO
Follow-on Public Offering, when an already-listed company issues fresh shares.
- IPO
Initial Public Offering, when a private company first sells shares to the public.
- KYC
Know Your Customer, the identity verification required to invest or open an account.
- Large-cap
The 100 largest companies on Indian exchanges by market capitalisation.
- Lock-in Period
A minimum holding period during which you cannot redeem the investment.
- Mid-cap
Companies ranked 101 to 250 by market capitalisation in India.
- NAV (Net Asset Value)
The per-unit market value of a mutual fund, calculated at the end of every business day.
- Nominee
The person who receives custody of your assets if you die, in the absence of a will.
- NSE and BSE
India's two main stock exchanges, where listed shares trade.
- PAN Card
Permanent Account Number, the 10-character ID issued by the Income Tax Department.
- Premium
The amount you pay an insurance company in exchange for cover.
- RBI
The Reserve Bank of India, the central bank that sets monetary policy.
- REIT
Real Estate Investment Trust, a listed vehicle that owns income-producing real estate.
- SEBI
The Securities and Exchange Board of India, the regulator for the securities market.
- Small-cap
Companies ranked 251 and below by market capitalisation on Indian exchanges.
- XIRR
Extended Internal Rate of Return, the annualised return on an investment with irregular cash flows like a SIP.