Glossary

Glossary Description
AER Annual Equivalent Rate - this illustrates what the interest rate would be if interest was paid and compounded once each year. This allows individuals to compare more easily what return they can expect from their savings over time. As every advertisement for a savings product which quotes an interest rate will contain an AER, you will be able to compare more easily what return you can expect from your savings over time.
Bank of England
base rate
The interest rate published by the Bank of England in connection with its open money market operations

Introductory
Bonus

The opportunity to receive a fixed introductory bonus on a variable interest rate account for a set period from the date of account opening.  At the end of the bonus period, variable rates without bonus will apply
Fixed rate A rate of interest that is fixed for a period of time
Fixed term A period of time that money is saved for which is agreed on opening the account
Gross The contractual rate of interest payable before the deduction of income tax at the rate specified by law (currently 20%)
Annual interest Interest is paid on an annual basis
Monthly interest Interest is paid on a monthly basis
Cash ISA Individual Savings Account - accounts designed to enable an individual to save without paying income tax on their savings.  For more details take a look at our guide to isas
Lump sum An amount of money an individual wants to deposit into an account
Net The rate of interest payable after allowing for the deduction of income tax at the rate specified by law (currently 20%)
p.a. Per annum means every year
Regular savings Saving regularly (e.g. every month) into an account
Tax-free Tax-free is the contractual rate of interest payable where interest is exempt from income tax
Tax-free
allowance
The amount allowed to be invested in a Cash ISA account which is free of income tax
Variable rate A rate of interest that may change over time
Withdrawal When instructions are carried out to pay money out of your account (e.g. cash taken out of an account)

View all our savings accounts to help you choose the right one.

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