Jargon Buster

The annual equivalent rate, or ‘AER’ for short, is the official rate for a savings account. It shows how much you’d earn over a year if you put money in the account and left it there. It’s designed to allow easy comparisons between accounts.

BACS stands for Bankers Automated Clearing System, a scheme behind the clearing and settlement of UK automated payment methods, including direct debit.

This is the rate of interest set by the Bank of England. The base rate influences the interest rate of savings accounts and can be subject to change at any time.

CHAPS stands for Clearing House Automated Payments System, a payment system used for sterling transactions in the UK. A CHAPS transaction occurs when a person transfers money from one account to another. Please note that there may be charges associated with CHAPS payments.

A deposit refers to any payment into your savings account. Please note, that with our savings accounts, a minimum deposit may be required to open an account.

A Direct Debit is an arrangement that allows a third party to transfer money from their account on agreed dates.

An easy access account is a type of savings account which offers the flexibility to withdraw money when needed. These accounts typically offer a lower, variable rate of interest; unlike a fixed or notice savings account which may offer higher rates.

Faster (or electronic) payments can be made online, over the phone, or in branch. As long as the receiving bank or building society uses faster payments too, the payment will arrive almost immediately.

FCA stands for the Financial Conduct Authority, who acts as the financial regulatory body in the UK. The FCA regulates over 58,000 financial services firms and financial markets, ensuring consumers get a fair deal for their financial needs.

A Fixed Rate Bond/ISA usually offers a higher rate of interest compared to an easy access account, however, the money cannot be accessed until a specific date.

An ISA that allows you to take money out of your savings account and put it back in within the same tax year without affecting your ISA allowance. 

FSCS stands for the Financial Services Compensation Scheme. The FSCS is the UK’s deposit protection scheme, protecting saver’s eligible deposits up to a total or £120,000 for sole accounts or £240,000 for joint accounts should a provider fail to meet its obligations.

The amount of interest you’ll receive on your savings before paying any tax.

The interest rate is the rate paid on the amount saved. The interest rate can be fixed or variable. Fixed rate means it will stay the same throughout the product term, variable rate means it could change.

ISA stands for Individual Savings Account and is a tax-free savings account that allows you to save money without paying tax on your savings.

The ISA allowance is a set amount of money you can deposit into an ISA each year to earn tax-free interest on your savings. The allowance is set by the government each tax year and can be split across the different types of ISA accounts.

A savings account shared by two individuals.

Maturity refers to the date when a fixed rate product ends and stops paying interest. At the time of maturity, savers will usually be offered another product by their bank or building society or can choose to withdraw their funds.

A notice account is a savings account where money cannot be withdrawn immediately. Instead, notice has to be given, which is usually between 30-120 days. A notice account will usually have a higher rate of interest than an easy access account.

The current account that you link to your savings account with us.

A physical notebook held by account holders that records all savings transactions.

Per annum (p.a) means every year.

The PSA is the amount individuals can earn on their savings without paying tax, based on the rate of tax they pay. This is separate from the ISA allowance. More information about the PSA is available on the government website.

A legal document that permits another person to act on your behalf in specified circumstances (e.g. illness).

The period over which taxes and benefits are calculated. This runs from 06 April – 05 April.

With Fixed Rate Bonds or ISAs, this is the amount of time you choose to lock your money away for (i.e. two years).

The interest rate you receive on variable interest rate accounts could go up or down, usually in line with the Bank of England Base Rate.

A withdrawal is the process of taking money out of a savings account.