Savings glossary

What does that term mean?


AER stands for Annual Equivalent Rate. Whenever you see an advert for a savings account which shows an interest rate, you will see the AER. This means you can use the AER to compare accounts. It shows what the interest rate would be if your interest was paid and compounded once each year.

Annual interest

Interest is paid on an annual basis.

Bank of England Bank Rate

Also known as the base rate, this is the interest rate published by the Bank of England in connection with its open money market operations.

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.

Compound interest

This is where interest is added to your total savings balance and your next interest payment is based on the now larger amount. So not only does your saving balance go up, it goes up increasingly quickly.

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 rate means that no tax will be automatically deducted from interest on your behalf. Depending on your personal circumstances, you may need to pay tax on the interest you earn and it will be your responsibility to pay any tax you may owe to HM Revenue and Customs (HMRC).

Interest rate

This is the percentage return that you will receive on your savings. There are gross, net & tax-free interest rates, depending on the account that you have.

Monthly interest

Interest is paid on a monthly basis.


Per annum means every year.

Regular savings

Saving regularly (e.g. every month) into an account.


Tax free means you will not pay income tax on your interest.

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.


When instructions are carried out to pay money out of your account (e.g. cash taken out of an account).

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Savings accounts and cash ISAs

Whatever you’re saving for, get there with Halifax.

See our savings accounts