What is the difference between SIP and lump sum investment?
SIP allows regular, small investments over time while lump sum is a one-time larger investment. SIP reduces risk via rupee cost averaging.
Which is better — SIP or Lump Sum?
SIP is ideal for salaried or cautious investors. Lump sum works better in bearish markets or when you have surplus funds.
What is ELSS?
Equity Linked Savings Scheme (ELSS) is a tax-saving mutual fund under Section 80C with a 3-year lock-in period.
What is EPS in stocks?
Earnings Per Share (EPS) is the portion of a company’s profit allocated to each outstanding share. Higher EPS usually indicates better profitability.
What is ROE?
Return on Equity (ROE) measures how efficiently a company generates profits from shareholder equity.
What is ROCE?
Return on Capital Employed (ROCE) evaluates how well a company uses all its capital (equity + debt) to generate profits.
What is a Sovereign Gold Bond (SGB)?
SGBs are government-backed gold investment instruments offering interest and redemption in rupee value of gold.
Can NRIs invest in mutual funds in India?
Yes, NRIs can invest through NRE/NRO accounts with proper KYC and FATCA compliance.
What is the minimum holding period for LTCG on shares?
More than 12 months. Gains over ₹1 lakh attract 10% Long-Term Capital Gains (LTCG) tax without indexation.
What is indexation?
Indexation adjusts the purchase price using inflation index to reduce taxable capital gains, mostly for debt funds.
Can I avoid capital gains tax in India?
Yes, by reinvesting in specified assets like residential property (under Section 54F) or Capital Gain Bonds (54EC).
What is the lock-in period for PPF?
15 years. Partial withdrawals allowed after 5 years. PPF is a safe, tax-free long-term investment.
Is mutual fund SIP taxable?
Only gains are taxable. Equity funds held >12 months attract 10% LTCG. SIP is not tax-free.
Can I withdraw SIP anytime?
Yes, unless it's in a tax-saving ELSS fund which has a 3-year lock-in. Normal SIPs are flexible.
What is compounding?
Compounding means earning returns on your previous returns. The earlier you start, the better.
What is a Tax Saver FD?
A fixed deposit with a 5-year lock-in period. Offers deduction up to ₹1.5 lakh under Section 80C.
What is an Index Fund?
It tracks a stock market index like Nifty or Sensex passively and has low costs. Great for beginners.
What is SIP step-up?
It lets you increase your SIP amount yearly. Helps grow your investment faster with rising income.
What is a pension plan?
Pension plans provide regular income after retirement. You can choose from private or NPS options.
Can NRIs open a PPF account?
No, NRIs are not allowed to open new PPF accounts, but existing ones can be continued till maturity.
What is CAGR?
Compound Annual Growth Rate shows your average annual returns over a specific period — smoother than YoY returns.
What are debt mutual funds?
Debt funds invest in bonds, T-Bills, and other fixed-income instruments. Less risky than equity funds.
Is SIP good during a market crash?
Yes, you get more units at lower prices. Continue SIPs during dips for better long-term returns.
What is diversification in mutual funds?
It means investing in different fund categories (equity, debt, hybrid) to manage risk.
What is Section 80C?
It allows tax deduction up to ₹1.5 lakh for investments in ELSS, PPF, NSC, Tax-Saver FDs, etc.
What are hybrid funds?
Hybrid funds invest in both equity and debt for balanced risk-return. Examples: Aggressive Hybrid Funds.
Is it better to invest in direct or regular mutual funds?
Direct plans have lower expense ratios and give higher returns over time. Choose direct if you’re DIY-investor.
What is a financial advisor?
Experts who help you plan your finances, investments, and retirement in a structured way.
What is a REIT?
Real Estate Investment Trusts allow you to invest in commercial real estate and earn rental income via stock exchange.
What is F&O trading?
Futures and Options are derivatives used for speculation or hedging. Very risky for beginners.
What is margin trading?
Borrowing money from broker to buy stocks. Can magnify profits or losses. Use with caution.
What is STCG tax in stocks?
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What is a ULIP?
Unit Linked Insurance Plans offer life insurance and market-linked investment in one. Lock-in: 5 years.
What is the maturity amount of PPF tax-free?
Yes, PPF maturity amount and interest earned are 100% tax-free under Section 10(11).
Can I hold multiple demat accounts?
Yes. But link each to a different broker. Not mandatory to close old ones unless inactive.
What is SIP delay penalty?
No penalty. If there are insufficient funds, SIP fails for that month. You can manually invest later.
Is ULIP better than mutual funds?
ULIPs combine insurance + investment but have high charges. Mutual funds are simpler and cost-effective.
What is 80CCD(1B)?
Additional ₹50,000 deduction allowed for NPS under 80CCD(1B), over and above ₹1.5 lakh of 80C.
What is FMP?
Fixed Maturity Plans are closed-ended debt mutual funds with a fixed lock-in — low-risk alternative to FDs.
What is an arbitrage fund? 
Also read: You can read our full FAQ guide on Multibagger Stock Ideas
It earns profits from price differences in different markets. Low-risk and taxed like equity.
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