A payment made from a super fund to a beneficiary when you
die. For example, from a super fund or insurance policy.
A medium-term investment issued by a company where investors
lend them money in exchange for a regular and fixed interest amount
for the term of the investment. The invested funds (principal) are
repaid at the end of the term (maturity) and are usually secured by
tangible property. They may be offered at call or for a set
A plastic card that gives you access to your bank accounts via
ATM and EFTPOS facilities.
A legal agreement for the repayment of unpaid debts that is less
formal and intrusive than bankruptcy. The
agreement is between you and all of your unsecured creditors and
allows you to pay back your debts over an extended period of time
at an amount per week you can afford.
When several loans are combined into one, with the aim of
reducing repayments. Also known as loan consolidation.
Comprises cash and fixed interest investments. You lend
money to an organisation in return for interest payments. The
company you lent to now owes you or is indebted to you.
Total debt divided by total equity. A company's equity
represents the amount of shareholder's funds.
An amount of money that you may be charged if you fail to make a
repayment when it is due on a loan or credit card.
Cash or fixed interest investments
that are generally low risk and less volatile than
A fee charged by a lender when a loan is paid off before a set
period has elapsed e.g. 3 years. Also known as an exit fee. It's to
cover the costs the lender incurred in setting up the loan.
A debt that can be paid off at some time in the future.
A super fund where your retirement benefits are calculated by a
predetermined formula. Retirement benefits are usually calculated
using your average salary over the last few years before you retire
and the number of years you worked in the company or public
service. In general, market fluctuations have limited effect on the
value of your benefit, although in periods of prolonged economic
downturn, your defined benefits could be affected. If the fund
performance is poor, the trustee will generally ask an employer to
help pay member benefits as required.
A person who relies on you for financial support e.g. children
under 18 or your non-working spouse.
Can be used in place of a deposit when a buyer exchanges
contracts on a property. It guarantees that the buyer will pay the
full deposit by an agreed date.
A decrease in the value of an asset.
A financial instrument whose value is 'derived' from an
underlying asset such as a share, commodity or index. Common types
of derivatives include options and futures contracts.
A payment collection method that allows loan or service
providers to draw money from your bank account on a regular
A way to resolve issues instead of going to court. All
Australian Financial Services (AFS) licensees, banks and other
credit providers must belong to a dispute resolution scheme.
Spreading investments across a variety of different asset
classes or within an asset class to reduce risk.
A payment made by a company to its shareholders. The payment is
a share of the profits of the company and is based on the number of
shares a person holds. A franked dividend
consists of profits the company has already paid tax on.
A financial ratio that measures how much a company pays out in
dividends each year relative to its share price.
An extra 15% tax on the super contributions of high income
earners. This tax is charged if your income plus your concessional
super contributions are above $250,000. There are different tax
rules for members of defined benefit super funds. More details are
available on the Australian Tax Office
website. Find out more about tax and super.
Last updated: 03 Jul 2015