Finance jargon, decoded.

US employer-sponsored retirement plan

A

7 terms

Alpha

Excess return above benchmark

Amortization

Gradual loan principal repayment

AMT

Alternative Minimum Tax (US)

Annuity

Guaranteed income for life

APR

Annual Percentage Rate

APY

Annual Percentage Yield

Asset Allocation

Portfolio split across asset classes

B

6 terms

Bear Market

20%+ sustained market fall

Beta

Sensitivity to market moves

Bond

Loan to a government or company

Bridge Loan

Short-term loan between transactions

Bull Market

20%+ sustained market rise

Buy-to-Let

UK rental property investment

C

13 terms

CAGR

Compound Annual Growth Rate

CGT Discount

Australian 50% capital gains discount

CIBIL Score

Credit score (300-900)

CMHC Insurance

Canadian mortgage default insurance

Coinsurance

Percentage you share on claims

Compound Interest

Interest on interest

Conventional Loan

Non-government US mortgage

Copay

Fixed amount per claim/visit

Council Tax

UK residential property tax

CPF Ordinary Account

🇸🇬

Singapore CPF savings, housing + retirement

CPP

Canada Pension Plan

Credit Score

Numeric rating of creditworthiness

Critical Illness Cover

Lump sum on diagnosis of named disease

D

6 terms

Debt-to-Income Ratio

Monthly debt ÷ monthly income

Deductible

What you pay before insurance kicks in

Diversification

Spread risk across holdings

Dividend

Cash distribution to shareholders

Dividend Yield

Annual dividend ÷ share price

Dollar-Cost Averaging

Invest a fixed sum at regular intervals

E

10 terms

Effective Tax Rate

Total tax ÷ total income

EI

Employment Insurance (Canada)

ELSS

Equity Linked Savings Scheme

Emergency Fund

3-6 months of expenses in cash

EMI

Equated Monthly Installment

Emirates ID

🇦🇪

UAE national ID

EPF

Employee Provident Fund

Escrow

Third-party holds funds until conditions met

ETF

Exchange-Traded Fund

Expense Ratio

Annual fund management fee

F

9 terms

FHA Loan

Federal Housing Administration mortgage (US)

FHSA

First Home Savings Account (Canada)

FICA

US Social Security + Medicare tax

FIRE

Financial Independence, Retire Early

First Home Super Saver

AU super withdrawal for home

FOIR

Fixed Obligation to Income Ratio

Franking Credits

Australian dividend tax credit

FSA

Flexible Spending Account (US)

Furusato Nōzei

🇯🇵

Japan hometown tax donation

G

2 terms

Gilt

Government security / bond

GST / HST

Canadian sales taxes

H

6 terms

HECS-HELP

Australian student loan scheme

Help to Buy

UK first-home equity loan scheme

HOA

Homeowners Association fees (US)

Home Buyers' Plan

Canadian RRSP home purchase withdrawal

HRA

House Rent Allowance

HSA

Health Savings Account (US)

I

5 terms

iDeCo

🇯🇵

Individual-type defined contribution pension (Japan)

Index Fund

Fund that tracks a market index

Inflation

Rise in prices over time

IRAS

🇸🇬

Inland Revenue Authority of Singapore

ISA

Individual Savings Account (UK)

K

1 term

KiwiSaver

🇳🇿

NZ retirement savings scheme

L

5 terms

Let Property Tax

UK rental income tax

Lifetime ISA

UK first-home & retirement ISA

LMI

Lenders Mortgage Insurance (Australia)

LTCG

Long-Term Capital Gains

LTV

Loan-to-Value Ratio

M

5 terms

Marginal Tax Rate

Tax rate on next dollar earned

MCLR

Marginal Cost of Funds based Lending Rate

Medicare Levy

Australian healthcare tax

Minijob

🇩🇪

German low-wage tax-favoured job

Mortgage Stress Test

Canadian B-20 qualifying rate rule

N

9 terms

National Insurance

UK payroll tax

NAV

Net Asset Value

NCD

Non-Convertible Debenture

Negative Gearing

Rental property loss strategy (AU)

Net Worth

Total assets minus total liabilities

NISA

🇯🇵

Nippon Individual Savings Account (Japan)

No-Claim Bonus

Discount for claim-free years

NPS

National Pension Scheme

NPS Tier 1

Mandatory NPS account with lock-in

O

3 terms

OAS

Old Age Security (Canada)

Opportunity Cost

What you give up by choosing

Overnight Rate (BoC)

Bank of Canada policy rate

P

10 terms

P/E Ratio

Price-to-Earnings ratio

PAYE

Pay As You Earn (UK)

Personal Allowance

UK tax-free income band

PKV

🇩🇪

Private Krankenversicherung (Germany)

PMAY

Pradhan Mantri Awas Yojana

PMI

Private Mortgage Insurance (US)

PPF

Public Provident Fund

PRSI

🇮🇪

Pay-Related Social Insurance (Ireland)

PSLF

Public Service Loan Forgiveness (US)

PST

Provincial Sales Tax (Canada)

Q

1 term

QST

Quebec Sales Tax

R

16 terms

Real Return

Return after inflation

Rebalancing

Restore target asset mix

Refinance

Replace existing loan with new one

REIT

Real Estate Investment Trust

Repo Rate

RBI benchmark lending rate

RESP

Registered Education Savings Plan (Canada)

Reverse Mortgage

🇺🇸🇨🇦

Home equity loan for seniors (US/CA)

Riester Pension

🇩🇪

German state-subsidised pension

Risk Premium

Extra return for bearing risk

RLLR

Repo Linked Lending Rate

RMD

Required Minimum Distribution (US)

Rollover

Move retirement balance tax-free

Roth IRA

Tax-free retirement account (US)

RRIF

Registered Retirement Income Fund (Canada)

RRSP

Registered Retirement Savings Plan (Canada)

Rule of 72

Doubling time of money

S

16 terms

SARS

🇿🇦

South African Revenue Service

Section 80C

Tax deduction up to ₹1.5L

Section 80D

Health insurance deduction

Section 87A

Tax rebate for low income

SGB

Sovereign Gold Bond (India)

Sharpe Ratio

Return per unit of risk

SIP

Systematic Investment Plan

SIPP

Self-Invested Personal Pension (UK)

SRS

🇸🇬

Supplementary Retirement Scheme (Singapore)

Stamp Duty Land Tax

UK property transfer tax

Standard Deduction

Flat deduction with no bills needed

STCG

Short-Term Capital Gains

STP

Systematic Transfer Plan

Sum Insured

Maximum insurance payout

Superannuation

Australian retirement savings

SWP

Systematic Withdrawal Plan

T

9 terms

Tax Residency (UAE)

🇦🇪

UAE personal income tax status

Tax-Free Savings Account (ZA)

🇿🇦

Tax-free investment cap R36k/year

Tax-Loss Harvesting

Sell losers to offset gains

TDS

Tax Deducted at Source

Term Insurance

Pure life cover with no maturity

TFN

Tax File Number (Australia)

TFSA

Tax-Free Savings Account (Canada)

TFSA Re-Contribution Trap

Canadian over-contribution penalty

Traditional IRA

Tax-deferred retirement account (US)

U

4 terms

ULIP