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Word of the day Collateral A collateral is an asset (like gold, property, etc) kept as a security for repayment of loan. If the borrower fails to repay, the lender can sell the collateral to recover the money. Collateral is required in the case of some loans for example loans where the amount is higher than a certain limit. Having a collateral helps reduce the lender’s risk. Join @csupdates

Word of the Day Recurring Deposit In a recurring deposit, a fixed amount of money is deposited regularly, usually on a monthly basis, for a pre-decided period of time. Each month, the same amount is deposited into the account until the end of the deposit term. At the end of the deposit term, you receive the total amount deposited along with the interest earned. RDs offer more flexibility in terms of the deposit amount compared to FDs. While FDs require a lump sum deposit at the beginning of the tenure, RDs allow you to start with smaller, regular deposits. Join @cmaupdates20

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Word of the Day Industry P/E Industry P/E refers to the average Price-to-Earnings ratio of companies within a specific industry. To find the industry P/E ratio, you would add up the P/E ratios of all the companies within the industry and then divide by the total number of companies. This gives you the average P/E ratio for the industry. Investors compare individual company P/E ratios to the industry average to check if a company might be undervalued or overvalued. Join @csupdates

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