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You ultimate financial jargon dictionary (H-P)

Isobel Lawrance 24th Mar 2022 No Comments

Reading Time: 4 minutes

Do you ever feel like you need a big financial jargon dictionary? The words and phrases used in letters, bank statements, on the radio, television or within newspapers, magazines and books, can leave us scratching our heads.

Even financial journalists can get a little dizzy from the amount of vocabulary out there. That’s why we have put together your ultimate financial jargon dictionary. This guide defines the most common words you may see day to day, as well as some of the more complex terms which you may only come across occasionally.

Don’t let language daunt you. From A to Z, we’ve got you covered. Read our financial jargon dictionary.



Hard Asset: An asset or resource with fundamental value.

Hedge: An investment made to balance or reduce negative impacts of the economy.

Hedge Fund: Managed investments which use risky strategies in a bid for greater return on investments.

Heir: An individual who will inherit part of or a whole estate, where the deceased failed to establish a last will and testament.

Holdings: An investment portfolio held by an individual.

Household Income: The income of all individuals within a household.



Identifiable Asset: Assets which can be given an approximate value at any given time, such as machinery or buildings.

Impact Investing: Investing which aims to provide positive social and economic benefits as well as financial gains.

Impairment: A permanent reduction in the value of an asset.

Import: A good or service bought into one country from another.

Income: The amount of money, assets or other transfers of value over a period of time.

Index Fund: A type of Mutual or Exchange-Traded Fund (ETF) which tracks and matches a financial market index.

Inflation: Decline in the value of a currency over time.

Inheritance: The benefits in the form of assets a named person receives when a loved one dies.

Inheritance Tax: The tax places on assets an individual inherits.

Insolvency: When a business or individual can no longer meet their financial obligations.

Insurance: A contract in which financial protection and reimbursement is given against losses.

Interest: A monetary charge for borrowing money.

Interest rate: The amount of the monetary charge for borrowing money.

Inventory: Raw materials used and the goods produced which are available for sale.

Investing: Allocating resources with the hope of gaining profit.

Investment: An asset acquired with the goal of generating income.

Investment Banker: An individual who works as part of a financial institution, concerned with investments and boosting capital.

Investor: A personal who commits capital with the expectation of gaining capital.

Invoice: A record between a buyer and a seller.



Joint Account: A bank account shared between two or more individuals.

Joint Liability: The obligation of two or more individuals to pay back a debt.

Judgement: A court decision.



Knowledge Economy: A system based on intellectual capital.



Landlord: A property owner who leases to another party.

Late Fee: The charge paid when an individual fails to pay a debt or loan.

Lease: The legal binding contract which outlines the terms when one party rents a property.

Leasehold: When an asset is leased.

Legal Tender: The legally recognised money in a jurisdiction.

Lender: An individual or business who makes funds available to another party with the expectation of them being paid back.

Levy: The legal seizure of assets to satisfy an outstanding debt.

Liability: Something a person or business owes, usually money.

Licensing Agreement: A legal written contract between two parties in which one party grants permission for the other to use their brand or trademark.

Life Insurance: A contract which guarantees a sum of money will be paid to beneficiaries if the policy owner dies.

Liquid Asset: An asset which can easy be converted into cash in a short period.

Living Wage: A theoretical income level which allows households to pay for food, shelter and other necessities.

Loan: A sum of money lent to a party in exchange for future repayment.

Luxury Tax: A tax on items deemed non-essential.



Market: A place where buyers and sellers exchange goods and services.

Markup: The difference in an investments lowest price and the price it is sold to a consumer.

Maturity: The date a financial transaction ends.

Merger: An agreement which unites two existing companies into one.

Minimum Wage: A legally required base pay for hourly workers.

Misery Index: The degree of economic stress faced due to joblessness or the cost of living.

Mortgage: A loan used to purchase a home.

Mortgage Rate: The interest paid on a mortgage loan.

Mutual Fund: A pool of money collected by investors to invest in stocks, bonds and assets.



National Currency: The legal tender issued by a country’s central bank.

Negative Return: When a business or individual experience financial loss or a loss in the value of their investments.

Nest Egg: A substantial sum of money saved for a specific purpose.

Net Worth: The value of assets an individual or company owns, minus anything they owe.



Obligation: The responsibility to meet the terms of a contract.

Offer: A proposal made by a buyer or seller.

Ombudsman: An official who investigates complaints against companies or financial institutes.

Open Market: A system with few or no barriers.

Overdraft: When there are insufficient funds in an account to cover a transaction, but a bank allows it.



Passive Income: Earnings from a business or rental property in which you are not actively involved.

Payday Loan: A type of short-term borrowing with high interest.

Payee: A party who receives payment.

Payment: The transfer of money in exchange for goods or services.

Peer-to-Peer Lending: Enables lending without a financial institution.

Pension Plan: An employee benefit which requires an employer to contribute financially to an employee’s pension.

Personal Finance: Covers the managing, saving and investing of money.

Personal Income: All incomes received by an individual.

Platinum: A precious metal and commodity.

Portfolio Investment: Ownership of a stock, bond or financial asset with the expectation it will grow in value.

Poverty: When a person or community lacks the financial resources for a basic standard of living.

Premium Bond: A bond trading above its face value.

Prepayment: The settlement of a debt or loan in advance of its due date.

Probate: Reviewing a last will and testament to ensure it is valid and authentic.

Profit: The financial benefit when revenue exceeds costs.

Proof of Funds: Documentation which demonstrates the ability of funds for a specific transaction.

Property: Anything an individual or business has legal hold over.


Source: Investopedia.com

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Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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