Indian Financial Glossary
65 essential financial terms across 7 clusters — universal fundamentals plus India-specific Indian Tax & Schemes (Section 80C, 80D, EPF/EPS, NPS, PPF, ELSS, NSC, Sukanya Samriddhi, LTCG, STCG, Form 16, old vs new tax regime) and Indian Markets & Banking (Sensex, Nifty 50, BSE/NSE, SEBI, AMFI, SIP, Demat, NRE/NRO/FCNR, RBI repo rate).
65 termsPlain EnglishZero jargon
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Financial Foundations
(10 terms)Asset AllocationAsset allocation is the strategy of dividing your investment portfolio among different asset categories — equity…→Cash FlowCash flow is the net movement of money into and out of your financial life over a given period — salary and other…→Compound InterestCompound interest is the process where your returns generate their own returns over time, causing money to grow at…→DiversificationDiversification is the practice of spreading your investments across different asset classes, sectors, and…→Emergency FundAn emergency fund is a dedicated pool of savings set aside exclusively for unexpected financial shocks — job loss…→Financial IndependenceFinancial independence means having enough invested wealth that you no longer need to work to cover your living…→InflationInflation is the rate at which prices of goods and services rise over time, reducing the purchasing power of your…→LiquidityLiquidity refers to how quickly and easily an asset can be converted into cash without significant loss of value…→Net WorthNet worth is the difference between everything you own (assets) and everything you owe (liabilities). In India…→Passive IncomePassive income is money earned with little or no active, ongoing effort. Unlike your salary, passive income flows…→
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Investing & Wealth Building
(10 terms)Bear Market / Bull MarketA bull market is a period of rising stock prices and investor confidence. A bear market is a sustained decline of…→Capital GainsA capital gain is the profit you make when you sell an investment for more than you paid. In India, capital gains…→Dividend InvestingDividend investing is a strategy focused on building a portfolio of stocks or mutual funds that pay regular cash…→ETF (Exchange-Traded Fund)An ETF (Exchange-Traded Fund) is a type of investment fund that trades on the stock exchange — just like buying…→Expense RatioAn expense ratio is the annual fee charged by a mutual fund, expressed as a percentage of your total investment…→Index FundAn index fund is a mutual fund designed to track the performance of a specific market index — such as the Nifty…→RebalancingRebalancing is the process of realigning your investment portfolio back to its original target allocation after…→Risk ToleranceRisk tolerance is the degree of investment volatility you are willing and able to withstand. It combines your…→SIP / Rupee Cost AveragingA SIP (Systematic Investment Plan) invests a fixed rupee amount at regular intervals — typically monthly …→Time in the Market'Time in the market beats timing the market' means that consistently staying invested over a long period produces…→
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Retirement & FIRE
(10 terms)Barista FIREBarista FIRE is a hybrid strategy where you accumulate enough invested assets to cover most living expenses, then…→Coast FIRECoast FIRE is the point at which you have invested enough that — even without investing another rupee — compound…→Fat FIREFat FIRE prioritises a comfortable, premium lifestyle in retirement — typically ₹1-2 lakh per month or more in…→FIRE (Financial Independence, Retire Early)FIRE stands for Financial Independence, Retire Early — a movement built around aggressive saving, disciplined SIP…→FIRE NumberYour FIRE number is the total invested corpus you need to achieve financial independence. In India, it is…→Lean FIRELean FIRE is a version of FIRE built around achieving financial independence on a modest, intentional budget …→Retirement PortfolioA retirement portfolio is the collection of investments you accumulate over your working life, specifically…→Safe Withdrawal Rate (SWR)The safe withdrawal rate (SWR) is the maximum percentage of your investment corpus you can withdraw each year in…→Sequence of Returns RiskSequence of returns risk is the danger that the timing of investment returns — not just their average — can…→The 4% RuleThe 4% rule states that if you withdraw 4% of your investment corpus in the first year of retirement and adjust…→
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Crypto & Alternative Assets
(6 terms)AltcoinAn altcoin is any cryptocurrency other than Bitcoin. The landscape ranges from Ethereum (with a market cap in the…→Bitcoin (BTC)Bitcoin is the world's first and largest cryptocurrency — a decentralised digital currency with a fixed supply of…→BlockchainA blockchain is a decentralised digital ledger that records transactions across a network of computers in a way…→Crypto WalletA crypto wallet stores the private keys needed to access and manage your cryptocurrency on the blockchain. It does…→DCA (Dollar-Cost Averaging) in CryptoDCA (dollar-cost averaging) in crypto means investing a fixed rupee amount into cryptocurrency at regular…→Market CapitalisationMarket capitalisation is the total market value of a company or crypto asset, calculated by multiplying the…→
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Debt & Budgeting
(4 terms)50/30/20 Budget RuleThe 50/30/20 rule divides your take-home salary (after TDS deduction) into three categories: 50% for needs, 30%…→Debt-to-Income Ratio (DTI)Your debt-to-income ratio (DTI) compares your total monthly EMI payments (home loan, car loan, personal loan…→The Avalanche MethodThe debt avalanche method pays off debts from highest interest rate to lowest, regardless of balance. It minimises…→The Snowball MethodThe debt snowball method pays off debts from smallest balance to largest, regardless of interest rate. Once the…→
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Indian Tax & Schemes
(13 terms)ELSS (Equity Linked Savings Scheme)ELSS (Equity Linked Savings Scheme) is a category of equity-oriented mutual funds that qualify for tax deduction…→EPF (Employees' Provident Fund)EPF (Employees' Provident Fund) is a mandatory retirement savings scheme for salaried employees in India, governed…→EPS (Employees' Pension Scheme)EPS (Employees' Pension Scheme 1995) is the pension component of EPF, providing monthly pension to members after…→Form 16Form 16 is the TDS (Tax Deducted at Source) certificate issued annually by employers to salaried employees…→LTCG (Long-Term Capital Gains Tax)LTCG (Long-Term Capital Gains) is the tax on profits from sale of capital assets held longer than the prescribed…→NPS (National Pension System)NPS (National Pension System) is a voluntary, defined contribution retirement savings scheme regulated by the…→NSC (National Savings Certificate)NSC (National Savings Certificate) is a fixed-income, 5-year savings scheme issued by the Government of India…→Old vs New Tax RegimeIndia's Income Tax Act offers two parallel personal income tax regimes: the old regime (deduction-based with…→PPF (Public Provident Fund)PPF (Public Provident Fund) is a long-term tax-free government savings scheme launched in 1968, with a 15-year…→Section 80CSection 80C of the Income Tax Act 1961 allows individuals and Hindu Undivided Families (HUFs) to claim up to ₹1.5…→Section 80DSection 80D of the Income Tax Act 1961 provides deduction for health insurance premiums paid for self, spouse…→STCG (Short-Term Capital Gains Tax)STCG (Short-Term Capital Gains) is the tax on profits from sale of capital assets held shorter than the prescribed…→Sukanya Samriddhi YojanaSukanya Samriddhi Yojana (SSY) is a Government of India small savings scheme launched in 2015 under Beti Bachao…→
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Indian Markets & Banking
(12 terms)Account Aggregator (RBI AA Framework)Account Aggregator (AA) is RBI's regulatory framework for consent-based financial data sharing between Financial…→AMFI (Association of Mutual Funds in India)AMFI (Association of Mutual Funds in India) is the industry body of all SEBI-registered mutual fund houses (Asset…→BSE & NSEBSE (Bombay Stock Exchange) and NSE (National Stock Exchange) are the two main stock exchanges in India where…→Demat AccountDemat (Dematerialised) Account is an electronic account that holds securities — shares, ETFs, bonds, mutual funds…→HDFC AMC (HDFC Mutual Fund)HDFC AMC (HDFC Asset Management Company Limited) is one of India's largest mutual fund houses, managing HDFC…→Nifty 50 (NSE Nifty)Nifty 50 is the benchmark equity index of the National Stock Exchange (NSE), comprising 50 of the largest, most…→Nippon India Mutual FundNippon India Mutual Fund (formerly Reliance Mutual Fund until 2019) is one of India's largest mutual fund houses…→NRE / NRO / FCNR AccountsNRE, NRO, and FCNR are the three categories of bank accounts available to Non-Resident Indians (NRIs) and Persons…→RBI Repo RateRepo rate is the interest rate at which the Reserve Bank of India (RBI) lends short-term funds to commercial banks…→SEBI (Securities and Exchange Board of India)SEBI (Securities and Exchange Board of India) is the statutory regulator of the Indian capital markets…→Sensex (BSE Sensex)Sensex (S&P BSE Sensex) is the benchmark equity index of the Bombay Stock Exchange (BSE), comprising 30 of the…→SIP (Systematic Investment Plan)SIP (Systematic Investment Plan) is a mode of investing in mutual funds where a fixed amount is automatically…→
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