Personal finance glossary
Every term has its own page: a one-sentence definition, the explanation, an example in lei, common questions and sources.
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The basics: prices, interest, time
- Compound interestInterest on interest: last year's gain earns a gain of its own this year.
- InflationThe pace at which prices rise: the higher it is, the less each leu buys.
- Real interest rateThe rate on paper minus inflation: it shows whether your money buys more or less.
- ReturnHow much an investment gained or lost, usually as a percentage per year.
- Rule of 72Divide 72 by the yearly rate to find, roughly, how many years it takes a sum to double.
Investing: shares, bonds, funds
- BondA loan you make to a government or company, in exchange for interest agreed in advance.
- DiversificationSpreading money across many different investments so no single one decides your fate.
- DividendThe part of profit a company pays its shareholders, usually once a year.
- ETFAn investment fund that tracks a basket of shares or bonds and whose units trade on the stock exchange, like shares.
- Fund costs (TER)The percentage a fund keeps from your money every year, whatever the result.
- Index fundA fund that buys the whole index, without trying to pick winners.
- Risk and volatilityHow much, and how often, an investment's value jumps up and down.
- ShareA small piece of a company, giving you a claim on part of its profits and value.
- Stock exchangeThe market where shares, bonds and ETFs are bought and sold, through brokers.
Borrowing
Pensions, tax and protections
- Deposit guaranteeIf a bank fails, the Bank Deposit Guarantee Fund, financed by the banks' contributions, returns up to €100,000 to each depositor.
- Government securities (Tezaur, Fidelis)Loans you make to the Romanian state, at a fixed rate and free of income tax.
- Pillar II pensionThe part of the pension contribution that goes into a personal account run by a private fund.
- Pillar III pensionA private pension you join voluntarily, with a tax deduction of up to €400 a year.
- Tax on investmentsWhat the state takes from interest, dividends and gains on selling shares, in 2026.
The state's money
- Budget deficitHow much the state spends above what it collects in a year; the gap is covered by borrowing.
- Public debtEverything the state owes, built up from past deficits; paid with interest out of today's and tomorrow's taxes.
- Sovereign ratingThe grade agencies such as S&P, Moody’s and Fitch give a state's ability to pay its debts.
This page explains mechanisms and shows what happened in the past. It does not recommend products, say what to buy, or take your situation into account.