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A stipend is actually a set amount of money given or paid on either a routine basis for work or to cover expenditures, such as a grant, apprenticeship, or traineeship. It is usually granted to interns as well as to the trainees who are not actually permanent members of the company. It is usually a small amount, just about enough to cover some of the interns’ and trainees’ expenditures.
Employers utilize this amount as a low-cost option for paying interns because they are not based on hourly labor. Interns, as well as trainees, get significant experience and information while working for the organization. Given the high cost of training at institutes, most people choose internships based on the stipend.
Some graduate institutions offer this amount to help students balance their time and finances while pursuing their academic goals. To reflect complementing benefits, universities commonly refer to the amount paid to grad students as a stipend instead of wages. Interns gain free education and experience, while the organization gains new talent and hands-on assistance. It can also be used to reward students at non-profit organizations, but they should not be used to reward volunteers because they may be required to be recorded as workers and so subject to taxation on the stipend. This is a one-time stipend that usually lasts shorter than a year.
Stipends are fixed amount paid to cover basic expenses such as food expenses, travel expenses etc.
The amount of stipend is usually lower than salary for the similar work.
Another term used for stipend is allowance, fee, salary etc.