Financial Glossary
Plain-English definitions of the Indian finance terms you meet every day — with formulas, examples and answers to common questions.
Systematic Investment Plan · SIP
A way to invest a fixed amount in a mutual fund at regular intervals.
Net Asset Value · NAV
The per-unit price of a mutual fund scheme.
Compound Annual Growth Rate · CAGR
The smoothed annual growth rate of an investment over time.
Extended Internal Rate of Return · XIRR
The annualised return when money is invested at multiple different dates.
Total Expense Ratio · TER
The annual fee a mutual fund charges, as a % of assets.
Assets Under Management · AUM
The total market value of investments a fund or AMC manages.
Equity Linked Savings Scheme · ELSS
A tax-saving mutual fund with a 3-year lock-in.
Exchange-Traded Fund · ETF
A fund that trades on the stock exchange like a share.
New Fund Offer · NFO
The first-time subscription offer of a new mutual fund scheme.
Initial Public Offering · IPO
The first sale of a private company's shares to the public.
Repo Rate
The rate at which the RBI lends to commercial banks.
Reverse Repo Rate
The rate at which the RBI borrows from banks.
Cash Reserve Ratio · CRR
The share of deposits banks must keep with the RBI in cash.
Statutory Liquidity Ratio · SLR
The share of deposits banks must hold in safe liquid assets.
Systematic Transfer Plan · STP
Moving money gradually from one fund to another.
Systematic Withdrawal Plan · SWP
Withdrawing a fixed amount from a fund at regular intervals.
Alpha
The excess return a fund earns over its benchmark.
Beta
How much an investment moves relative to the market.
Equated Monthly Instalment · EMI
The fixed monthly payment to repay a loan.
Nifty 50
India's benchmark index of the 50 largest NSE companies.
Sensex
The BSE benchmark index of 30 large Indian companies.
National Pension System · NPS
A government retirement savings scheme with extra tax benefits.