Finance, in plain words.
Short definitions to help you read a document, understand a guide or ask a clearer question. Read the linked source for context.
13 terms available
- Demat accountAccounts
An account that holds securities in electronic form through a depository participant. It is not the same as the account used to place trading orders.
- Trading accountAccounts
An account with a registered stock broker used to place buy and sell orders. A separate demat account holds eligible securities.
- Depository participantAccounts
An intermediary through which investors access depository services. Commonly shortened to DP; the DP and the depository are different entities.
- KYCAccounts
Know Your Customer: identity and other checks required by a financial intermediary. Read the documents and share information only through verified channels.
- Mutual fundFunds
A pooled investment arrangement in which money from investors is invested according to a scheme’s stated objective. Its value and risks depend on the underlying investments.
- SIPFunds
Systematic Investment Plan: a method of investing periodically in a mutual-fund scheme. A SIP is not a separate asset class and does not guarantee a profit.
- NAVFunds
Net Asset Value: the per-unit value of a fund after accounting for its assets and liabilities. A low NAV alone does not make a fund cheaper or better.
- Expense ratioFunds
The recurring expenses of a mutual-fund scheme expressed relative to its assets. It affects the amount remaining for investors; check the scheme documents.
- LiquidityRisk
How readily an investment can be converted to cash. A sale or redemption may involve waiting periods, restrictions, costs or an unfavorable price.
- DiversificationRisk
Spreading exposure across investments rather than relying on one. It can reduce concentration risk but cannot remove all investment risk or prevent every loss.
- LeverageRisk
Using borrowing or instruments that create exposure larger than the money committed. It can magnify losses as well as gains and can lead to additional funding requirements.
- Investment adviserProfessionals
A professional role involving personalized investment guidance. Verify the relevant registration and service terms rather than treating general education as personal advice.
SEBI: Understanding Investment Advisors (opens in a new tab)
- Research analystProfessionals
A professional role involving securities research and investment recommendations. Research and personalized advisory services have different regulatory and service boundaries.
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