FINANCIAL LITERACY (University of Delhi)

Vocabulary flashcards covering key terms from the Financial Literacy notes (Unit I–IV), including banking, digital finance, investments, insurance, and personal tax concepts.

Savings

Money left after consumption that can be set aside for future use or investment.

Budget

A plan that outlines expected income and expenses to manage money and achieve financial goals.

Financial Planning

A systematic approach to meeting life goals by allocating resources, managing risk, investing, and planning for retirement.

Time Value of Money

The principle that money today is worth more than the same amount in the future because it can earn interest.

Present Value

The current value of future payments discounted at a given rate, PV = FV/(1+i)^n.

Future Value

The value at a future date of a present amount when invested at a certain rate.

Present Value Formula

PV = FV/(1 + i)^n, used to calculate current worth of future cash flows.

Effective Annual Interest Rate

The actual annual rate of return when compounding is taken into account.

Nominal Interest Rate

The stated interest rate not adjusted for compounding within the period.

Cashless Banking

Moving towards electronic payments (cards, wallets, mobile payments) to reduce cash handling.

Debit Card

A card that withdraws funds directly from the cardholder’s bank account at purchase.

Credit Card

A card that allows borrowing up to a credit limit to make purchases and pay later.

Smart Card

A card that contains an integrated circuit storing data for payments or identification.

USSD

Unstructured Supplementary Service Data; a payment method usable without a smartphone.

QR Code

A machine-readable code used to complete payments by scanning with a device.

Mobile Wallet

A digital wallet app that stores payment information and enables quick transactions.

EFT

Electronic Fund Transfer; electronic movement of funds between accounts.

Net Banking

Online banking; accessing banking services via the internet.

RTGS

Real Time Gross Settlement; real-time, one-to-one funds transfer between banks.

NEFT

National Electronic Funds Transfer; nationwide funds transfer system in India.

IMPS

Immediate Payment Service; a mobile-based fund transfer service.

UPI

Unified Payments Interface; instant interbank transfers via a single ID.

Digital Wallets

Software-based systems that securely store payment information for online purchases.

PAN Card

Permanent Account Number; a key tax identification number issued by the tax department.

KYC Norms

Know Your Customer; procedures to verify a customer’s identity.

RBI

Reserve Bank of India; the central bank/regulator of the Indian banking system.

Banking Ombudsman

RBI-appointed officer for swift redressal of bank/customer complaints.

Public Sector Banks

Banks with majority government ownership and control.

Private Sector Banks

Banks owned/managed by private entities.

Cooperative Banks

Banks owned and run by members of a cooperative society.

Regional Rural Banks

Banks designed to serve rural areas with regional focus.

Commercial Banks

Banks that accept deposits and provide loans and services to individuals and businesses.

Foreign Banks

Banks incorporated outside India but operating in India under RBI rules.

Term Deposit

Fixed deposit; funds deposited for a fixed period at a fixed interest rate.

Savings Bank Account

Basic bank account with interest and withdrawal accessibility.

Current Account

Account for business use with high transaction frequency; usually no interest.

Recurring Deposit

Deposit made regularly over a period to earn interest and a lump sum at maturity.

Mutual Funds

A financial intermediary that pools investors’ money to invest in a diversified portfolio.

Index Funds

Mutual funds that replicate a market index to achieve similar returns.

Exchange Traded Funds (ETF)

Funds traded on an exchange that track an index or basket of assets.

Systematic Investment Plan (SIP)

Regular, planned investment in mutual funds to average costs and benefit from compounding.

Unit Linked Insurance Plan (ULIP)

Life insurance that combines insurance with investment in funds.

Endowment Policy

Life insurance that includes saving components and pays at maturity or on death.

Money Back Policy

Life insurance that pays portions of the sum insured at regular intervals.

Whole Life Insurance

Life cover that lasts for the insured’s whole life, subject to premium payments.

Term Insurance

Life cover for a specified term with a death benefit if the insured dies within term.

Health Insurance

Insurance covering medical expenses due to illness or injury.

Pension Plan

Investment and insurance plan for retirement earnings.

National Pension System (NPS)

Government-backed pension scheme offering retirement benefits and investment choices.

Public Provident Fund (PPF)

Long-term, government-backed savings scheme with tax benefits.

Employee Provident Fund (EPF)

Workplace retirement savings scheme with employer and employee contributions.

I.T.R./e-Filing

Income Tax Return; filing tax returns electronically.

E-Filing

Electronic filing of income tax returns; faster and secure submission.

Insurable Interest

Interest in a subject matter such that loss would affect the insured.

Indemnity

Protection against loss where compensation restores the insured to original position.

Subrogation

Insurer’s right to pursue recovery from third parties after paying a claim.

Premium

Amount paid by the insured to the insurer for coverage.

Nominee/Beneficiary

Person designated to receive benefits from an insurance policy.

Maturity

Date when a savings or insurance policy ends and pays out.

Annuity

A contract that provides a series of payments for a period or for life.

Sukanya Samriddhi Account

Country-specific savings plan for the girl child with tax benefits.