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early termination fee

A fee which may be applied if a loan is repaid earlier than the stated term.

earnings per share (EPS)

A financial ratio calculated by dividing the company’s earnings (profits) by the number of shares on issue. The higher the EPS, the more a share is potentially worth. See also price equity ratio.

effective interest rate

An annual interest rate that takes into account the effect of compound interest and fees. Also known as an effective yield or the annual percentage rate (APR).

EFTPOS (Electronic Funds Transfer at Point of Sale)

EFTPOS is an Australian network for processing credit cards, debit cards and charge card payments at the 'point of sale'. EFTPOS also allows users of the system to withdraw cash at the time of purchasing a product or service through the merchant's EFTPOS terminal. This function is known as 'debit card cashback' in many other countries.

eligible rollover fund (ERF)

A holding account designed to receive the super benefits of lost members and those with low account balances that are no longer receiving contributions.

encumbered

An asset, such as a house or motor vehicle, which is owned by one entity but where someone else has a valid claim over it. For example, if your home is mortgaged, you own the asset but your lender has a claim over your home until the debt has been repaid.

enduring power of attorney

Like an ordinary Power of Attorney (PoA), an enduring power of attorney authorises your nominated representative to make property and financial decisions for you. Unlike an ordinary PoA, an enduring PoA continues to have effect if you become mentally incapacitated at a later date.

EPS

See earnings per share.

equities

See shares.

equity

The value of an asset such as your house or property, less any money owing on it.

equity investment

An investment where you buy and hold shares in a company or property from which you expect to receive income and capital gains.

equity release

A way of accessing the equity in your home to provide you with additional funds in retirement. See reverse mortgage and home reversion scheme.

ERF

See eligible rollover fund.

establishment fee

A one-off fee which may apply to set up a personal or other loan.

estate

All of a person's assets, whether real property or personal property, and their liabilities or debts.

ethical investment

An investment strategy that promotes positive environmental, social or ethical issues. Avoids investment in industries and companies that produce goods harmful to health, society or the environment e.g. chemicals, tobacco, armaments. Each fund will have its own interpretation of the values it wants to protect or promote. You will find details in the company's PDS. Also known as socially responsible, sustainable or socially conscious investing.

excess

In relation to an insurance contract, it is the amount of an insurance claim that consumers have to pay. The amount is specified in the insurance policy.

exchange rate

The price at which the currency of one country can be exchanged for the currency of another.

excluded value

Anything that is not included in a mobile phone plan for a regular monthly payment.

exclusion

In relation to an insurance contract, it is something that is specifically not covered under the insurance policy. Depending on the type of policy these may include specific events, illnesses or pre-existing conditions.

executor

A person specified in a will, or appointed, to administer the will.

execution risk

When a lack of market liquidity causes a gap between the price at which you place a trading order, and the price you receive. This can be a risk when trading certain complex products such as contracts for difference (CFD) and foreign exchange (FX) contracts.

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