Money glossary

Plain-language definitions of every financial term we use on PaisaExpert. Bookmark this page — we add to it whenever we publish a new piece.

APR (Annual Percentage Rate): The annual cost of borrowing, expressed as a percentage. Includes interest plus most mandatory fees. Indian credit cards typically run 36-48% APR.
CIBIL Score: A 3-digit number (300-900) calculated by TransUnion CIBIL that summarises your credit history. Banks use it to decide loan and card approvals. 750+ is considered very good.
DICGC: Deposit Insurance and Credit Guarantee Corporation — an RBI subsidiary that insures bank deposits up to ₹5 lakh per depositor per bank. Covers savings + FD + RD combined.
DPDP Act: Digital Personal Data Protection Act, 2023 — India's law that governs how organisations collect, use and store personal data. Gives you rights to access, correct, and delete your data.
ELSS: Equity Linked Savings Scheme — a tax-saving mutual fund category. Investments up to ₹1.5 lakh qualify for Section 80C deduction. 3-year lock-in. Equity-heavy, so volatile.
EMI: Equated Monthly Instalment — the fixed monthly payment that covers both interest and principal on a loan. Indian home/personal loans use reducing-balance EMIs.
FOIR: Fixed Obligation to Income Ratio — your total EMI payments as a percentage of monthly income. Banks like FOIR under 40-50% before approving new loans.
HRA: House Rent Allowance — a salary component that's partly tax-exempt for salaried employees who pay rent. The exempt portion is calculated by a specific formula.
IEPF: Investor Education and Protection Fund — the central authority that holds unclaimed dividends and shares (transferred from companies after 7 years of being unclaimed). You can search and claim back at iepf.gov.in.
Lifestyle inflation: The tendency for spending to rise as income rises, leaving the savings rate flat or declining. The most common reason high earners still feel financially tight.
NPS: National Pension System — a government-backed retirement savings scheme. Contributions are tax-deductible (Section 80CCD). Comes in Tier 1 (locked till 60) and Tier 2 (liquid).
PPF: Public Provident Fund — a 15-year, government-backed savings scheme. Tax-free returns (currently around 7.1%). Up to ₹1.5 lakh/year qualifies for 80C deduction.
Reducing balance: An interest calculation method where each month's interest is calculated on the outstanding balance, which decreases as you repay. Used by all standard Indian loans.
SIP: Systematic Investment Plan — investing a fixed amount in a mutual fund every month. Makes investing automatic and removes market-timing decisions.
Step-up SIP: A SIP that increases by a fixed percentage every year, usually matched to your annual income growth. Nearly doubles the final corpus over 20 years vs a flat SIP.
Sweep-in FD: An automatic transfer from a savings account into a fixed deposit when the balance crosses a threshold. Combines savings-account liquidity with FD interest rates.
TDS: Tax Deducted at Source — tax that the payer (bank, employer) deducts before paying you. On bank interest, TDS is 10% above ₹40,000/year (₹50,000 for seniors). You may owe more or less depending on your slab.
UDGAM: RBI's Unclaimed Deposits Gateway to Access inforMation — a portal at udgam.rbi.org.in where you can search across 30+ Indian banks for any unclaimed account in your name.
Wealth-to-income ratio: Your total invested wealth divided by annual income. A rough rule of thumb: 1× by age 30, 3× by 40, 6× by 50, 8× by 60. Used in our Money Health Check.

Term we didn't cover? Email us — we'll add it.