Jargon translator
Money words, in plain language.
Bank letters, payslips and loan contracts are full of words nobody explains. Search for a word or jump to a letter. More questions? See the 25 common money questions.
A
- Access bond
- A home loan facility that lets you take back money you have paid in. Handy in an emergency. Risky if it pays for everyday spending, because the debt then runs for years.
- ADDRESS (Money-Sense)
- A line that is over its ideal amount while the month does not balance. It needs to change.
- Arrears
- Money you owe because a payment was missed or was too small.
- Asset
- Something you own that has value, such as a home, a car or savings.
B
- Balloon payment
- A large lump sum due at the end of a loan, often on a car. It keeps the monthly instalment low but you still owe it.
- Beneficiary
- The person you name to receive a payout, for example from a funeral policy or a retirement fund.
- Bond
- A home loan. The bank holds a claim on the property until you have repaid it.
- Budget
- A plan for how you will spend and save your money each month.
C
- Co-payment
- The part of a medical bill that you pay yourself because your plan does not cover all of it.
- Compound interest
- Interest earned on your savings plus the interest already added. It is why starting early matters. On debt it works against you.
- Consumer price index (CPI)
- The official measure of inflation. Statistics South Africa publishes it every month.
- Credit bureau
- A company that keeps your credit record, such as Experian, TransUnion or XDS. Lenders look at it before they say yes.
- Credit life insurance
- Cover that settles a loan if you die or cannot work. It is often added to the loan. Check what it costs.
- Credit limit
- The most you are allowed to owe on a card, store account or overdraft.
- Credit score
- A number that sums up how reliably you have paid your debts. Each bureau uses its own scale.
D
- Debt counsellor
- A person registered with the National Credit Regulator who assesses your debts and helps you plan repayment under debt review.
- Debt review
- A legal process under the National Credit Act that combines your debts into one affordable monthly payment.
- Deposit
- The amount you pay up front when you buy something on credit. A bigger deposit means a smaller loan.
- Disposable income
- What you have left after tax and essential costs.
E
- Emergency fund
- Savings set aside for surprises, usually three to six months of essential expenses.
- Emolument attachment order
- A court order that makes your employer take money off your pay to settle a debt. People also call it a garnishee order.
- Excess
- The amount you pay on a claim before your insurer pays the rest.
F
- Fixed deposit
- Money locked away for a set period at an agreed interest rate.
- Fixed expense
- A cost that stays about the same each month, such as rent or a loan instalment.
- FSCA
- The Financial Sector Conduct Authority. It supervises how financial companies treat their customers.
G
- Gross pay
- Your pay before tax and other deductions.
I
- Ideal budget (Money-Sense)
- An amount for each line of your budget for your income, household and area. Together the lines add up to 100% of your take-home pay.
- Inflation
- The rate at which prices rise. When inflation is higher than the interest on your savings your money buys less over time.
- Initiation fee
- A once-off fee a lender charges to set up a loan. It is often added to the amount you repay.
- Interest
- The price of borrowing money, or the reward for lending it. You pay it on loans and earn it on savings.
L
- Liability
- Something you owe, such as a loan or a credit card balance.
M
- Medical aid
- A scheme you pay into every month that covers part or all of your medical costs. Also called a medical scheme.
- Money market account
- A savings account that pools money into short-term lending. It usually gives quick access and a rate above a normal savings account.
N
- National Credit Regulator (NCR)
- The body that regulates credit in South Africa. It registers lenders and debt counsellors.
- Net pay
- Your pay after tax and deductions. Money-Sense calls it take-home pay.
- Notice account
- A savings account where you tell the bank a number of days before you withdraw. It usually pays more than an instant-access account.
O
- OFFSET (Money-Sense)
- A line that is over its ideal amount while the month still balances. Something else is paying for it.
- Overdraft
- Permission to spend more than you have in your bank account. You pay interest on the amount you owe.
P
- PAYE
- Pay As You Earn. The income tax your employer takes off your pay and sends to SARS.
- Pension fund
- A retirement fund you and your employer pay into. When you retire it pays you a monthly income.
- Premium
- The amount you pay each month or year for insurance.
- Preservation fund
- A fund where you keep your retirement money when you leave a job. It stops you cashing it out by mistake.
- Prime rate
- The rate banks use as a starting point for loans. In South Africa it is the repo rate plus 3.5 percentage points.
- Provident fund
- A retirement fund like a pension fund. The difference is in how the money may be paid out at retirement.
R
- Repo rate
- The rate at which the South African Reserve Bank lends to banks. When it changes your loan and savings rates usually move too.
- Retirement annuity (RA)
- A retirement savings product you take out yourself. It gives a tax deduction on what you pay in.
S
- Settlement amount
- The exact amount needed to pay off a loan in full on a given day. Ask for it in writing.
- Short-term insurance
- Cover for things you own, such as a car, your home or your belongings.
- Stokvel
- A group of people who pay money in regularly. The pot is paid out to members in turn or kept for an agreed purpose.
T
- Take-home pay
- What lands in your bank account after tax and deductions. Money-Sense uses this number for every benchmark.
- Tax-free savings account
- A savings account where interest and growth are not taxed. There are yearly and lifetime limits.
- Two-pot system
- The retirement rules from 1 September 2024. One third of contributions goes to a savings pot you can withdraw from. Two thirds go to a retirement pot that stays locked.
U
- UIF
- Unemployment Insurance Fund. You and your employer each pay 1% of your pay, up to a monthly limit. It pays a limited benefit if you lose your job.
- Unit trust
- A fund that pools money from many people and invests it in shares, bonds or cash. You own units in the fund.
V
- Variable expense
- A cost that changes month to month, such as groceries, fuel or takeaways.
Financial education, not financial advice. Money-Sense does not recommend any product and nothing here is personalised advice. Results depend on the figures you enter and on assumptions that can change. Speak to an authorised financial services provider before you make a financial decision.