Glossary
The words, in plain English.
Every term we use on this site, defined once. If something here is still unclear, that is our failure rather than yours, so tell us.
Estate planning
- Intestate succession
- What happens when someone dies without a valid will: the estate is distributed according to succession law rather than intention. It is rarely what the person would have chosen and it is slower for everyone involved. See also: Will , Nominee
- Nominee
- A person named to receive an account or policy benefit after the holder dies. The effect on ownership depends on the asset and applicable law; some life insurance nominations confer beneficial entitlement. Review nominations alongside your will with a legal professional. See also: Will , Intestate succession
- Will
- A legal document setting out who inherits what. Where a will and a nomination disagree, the will generally governs who ultimately receives the asset. Registration is not mandatory in India, though proper execution and witnessing matter. See also: Nominee , Intestate succession
Investing
- AMC Asset Management Company
- The company that runs a mutual fund scheme and employs the fund manager. You invest in a scheme; the AMC manages it and charges the expense ratio for doing so. See also: Expense ratio , NAV
- ARN AMFI Registration Number
- The registration number issued to a mutual fund distributor by the Association of Mutual Funds in India. Harbla Finserv holds ARN-86344. A distributor should display it, and you are entitled to ask for it. See also: EUIN , Mutual fund distributor
- Asset allocation
- How your money is divided between equity, debt, gold and cash. It drives most of the variation in a portfolio's outcome, considerably more than which particular fund you chose within each category. See also: Rebalancing
- CAGR Compound Annual Growth Rate
- The single annual rate that would take an investment from its starting value to its ending value over a period. It smooths out the journey, so it describes the outcome rather than the ride. See also: XIRR , Real return
- Direct plan
- The version of a mutual fund scheme bought without a distributor. It carries a lower expense ratio because no commission is paid, so its returns are slightly higher than the regular plan of the same scheme. See also: Regular plan , Expense ratio
- EUIN Employee Unique Identification Number
- The number identifying the individual person who advised on a mutual fund transaction, as distinct from the firm's ARN. It exists so that a specific piece of advice can be traced to whoever gave it. See also: ARN
- Exit load
- A charge applied when you redeem units before a stated holding period, usually within a year. It exists to discourage short-term trading in and out of a fund. See also: NAV
- Expense ratio
- The annual percentage a fund charges for managing your money, deducted from the fund rather than billed to you. It is small in any one year and compounds substantially across a long holding period. See also: Direct plan , Regular plan
- Inflation
- The rate at which prices rise, and therefore the rate at which idle money loses purchasing power. Planning against headline inflation understates goals such as education and healthcare, which have historically risen faster. See also: Real return
- Lock-in period
- A period during which an investment cannot be redeemed. ELSS has three years, PPF has fifteen with partial access earlier. A lock-in is a real cost and should be weighed against whatever benefit is being offered for accepting it. See also: ELSS , PPF
- Mutual fund distributor
- A person or firm registered with AMFI to distribute mutual fund schemes. A distributor is paid a commission by the fund house and does not charge you a fee, which is different from a SEBI-registered Investment Adviser. See also: ARN , Regular plan , Direct plan
- Real return
- The return left after inflation is taken out, calculated with the Fisher relation rather than by subtraction. It answers whether you can buy more than before, which the headline return does not. See also: CAGR , Inflation
- Rebalancing
- Periodically selling some of what has grown and buying more of what has not, to return a portfolio to its intended allocation. It is uncomfortable by design, because it means trimming whatever has done best. See also: Asset allocation
- Regular plan
- The version of a mutual fund scheme bought through a distributor. Its expense ratio includes a trail commission paid to that distributor, which is why its returns run slightly below the direct plan of the same scheme. See also: Direct plan , Expense ratio
- SIP Systematic Investment Plan
- A fixed amount invested into a mutual fund at a fixed interval, usually monthly. It spreads your purchase price across whatever the market does instead of betting everything on one entry point. See also: SWP , STP , NAV
- STP Systematic Transfer Plan
- Moving a lump sum into equity gradually by parking it in a debt fund and transferring a fixed amount each month. It is a middle path between investing everything at once and leaving it in cash. See also: SIP
- SWP Systematic Withdrawal Plan
- The reverse of a SIP: a fixed amount withdrawn from a fund at a fixed interval while the remaining balance stays invested. It is how a built corpus is turned into a monthly income. See also: SIP , Corpus
- XIRR Extended Internal Rate of Return
- The annualised return on money paid in and taken out at irregular intervals. It is the only fair way to compare an investment with uneven contributions against one with a single lump sum. See also: CAGR
Protection
- Emergency fund
- Money kept accessible to cover several months of expenses without selling investments or borrowing. It is the floor beneath a plan: without it, one bad month forces you to sell at the worst possible time. See also: Asset allocation
- Endowment policy
- A policy combining life cover with a savings element and a maturity payout. Judged separately, it is usually modest cover and a modest investment, which is easy to miss when the two are sold as one product. See also: Term insurance , Sum assured
- Sum assured
- The amount an insurance policy pays out on a claim. Sizing it against your obligations, rather than against a multiple of salary, is what makes it defensible. See also: Term insurance
- Term insurance
- Pure life cover for a fixed period, paying out only on death, with no maturity value. Because nothing is bundled in, it buys far more cover per rupee than any policy that also promises to return your money. See also: Sum assured , Endowment policy
Retirement
- Corpus
- The total accumulated sum available for a goal, most often retirement. Sizing the corpus is half the work; drawing an income from it without exhausting it is the other half. See also: SWP , SIP
- EPF Employees' Provident Fund
- The statutory retirement scheme for salaried employees, funded by contributions from both employee and employer. Many people are further along on retirement than they think once the EPF balance is counted. See also: PPF , Corpus
- NPS National Pension System
- A retirement scheme with market-linked returns, a low cost structure and restricted access before retirement, part of which must be used to buy an annuity. The lock-in is the trade for the tax treatment. See also: Corpus , Lock-in period
- PPF Public Provident Fund
- A government-backed long-term savings scheme with a fifteen-year term, a fixed annual contribution cap and tax-free interest. It is a debt instrument, so it belongs in the debt part of an allocation rather than alongside equity. See also: EPF , Lock-in period
Tax
- ELSS Equity Linked Savings Scheme
- An equity mutual fund with a three-year lock-in for each investment. Tax deduction eligibility depends on the applicable tax year, regime and statutory limits. The lock-in does not remove market risk or guarantee returns. See also: Section 80C , Lock-in period
- LTCG Long Term Capital Gains
- The gain on an asset held beyond a defined period, taxed differently and usually more favourably than a short-term gain. The holding period and rate depend on the asset, and both have changed more than once. See also: STCG
- Old and new tax regime
- India offers tax regimes with different rates and permitted deductions. Compare your income and eligible deductions for the applicable tax year, and check the rules for choosing or switching regimes. A tax-saving investment does not automatically qualify under every regime. See also: Section 80C
- Section 80C
- Section 80C is a deduction provision of the Income-tax Act 1961 for eligible investments and expenses, subject to conditions and a cap. For tax years beginning from 1 April 2026, check the corresponding provisions of the Income Tax Act 2025 and your regime before claiming a deduction. See also: ELSS , Old and new tax regime