Personal Finance Glossary

A Systematic Investment Plan (SIP) is a way of investing a fixed amount of money in a mutual fund at regular intervals — typically every month.

CAGR is the smoothed annual rate at which an investment would have grown if it had compounded steadily over a given period.

Compound interest is interest earned not just on your original investment, but also on the interest that has already been added to it.

ELSS is a category of equity mutual fund that qualifies for tax deduction under Section 80C of the Income Tax Act, with a mandatory 3-year lock-in.

The Public Provident Fund is a government-backed, long-term savings scheme with a 15-year lock-in, tax-free interest, and Section 80C tax benefits.

An EMI is the fixed monthly amount you pay to a lender to repay a loan over a set period, comprising both principal and interest.

The 50/30/20 rule is a budgeting framework that splits your post-tax income into 50% needs, 30% wants, and 20% savings and debt repayment.

An emergency fund is a pool of easily accessible cash set aside to cover unexpected expenses without forcing you to break investments or take on debt.