We've put together a financial dictionary that gives you clear definitions about financial terms you may see.
The annual equivalent rate (AER) is a term used to describe the interest rate that is applied to savings products on an annual basis, taking into account the effects of compounding.
What does the base rate mean in the UK? The base rate refers to the benchmark interest rate set by the Bank of England
What does capital gains tax mean in the UK? Capital gains tax is a tax applied to the profit made from selling certain assets.
What does Cash ISA mean in the UK? A cash ISA is a savings account that offers tax-free interest.
Compound interest is the process of where interest is earned on the initial savings, and then interest is calculated based on the increased balance.
What does a deposit mean? A deposit is when you place money into a savings account.
What is direct debit? Direct debit is when you allow a service provider to automatically withdraw funds from your bank account on a regular basis.
What is the FCA? The Financial Conduct Authority is the financial regulatory body in the UK.
What is the FSCS? The FSCS is a UK compensation scheme that provides protection to consumers if a financial service cannot fulfil its financial obligations.
What is a fixed rate? A fixed rate refers to the interest rate that remains unchanged for a specific period of time.
HMRC, short for His majesty's Revenue and Customs, is the UK government department responsible for managing and collecting taxes in the UK.
What does gross rate mean? The gross rate refers to the interest rate on a savings account before any deductions such as taxes or fees.
An ISA allowance is the maximum amount of money you can contribute to an ISA in a given tax year.
An ISA (individual savings account) is a tax-efficient savings account available to residents of the UK.
An interest rate refers to the percentage at which a financial provider compensates you for keeping your money with them.
A lump sum refers to a single, large sum of money that is deposited or invested at once, rather than in smaller increments over time.
Open banking is a system that allows individuals to securely share their financial data with authorised 3rd party providers through APIs.
A savings bond is a savings product offered by the government or financial providers that lets people lend their money for a fixed period of interest in return.
A savings account is a type of bank account designed for individuals to securely deposit and store their money, whilst earning interest over time.
A variable rate refers to an interest rate that is subject to change over time.