Understanding key saving terms
Understanding the key terms around savings can help you to choose products and make decisions that can help you make the most of them!
So let’s decode the acronyms and phrases around savings with our jargon buster.
AER
The Annual Equivalent Rate of interest shows you a truer picture of what you can expect if you keep your money in a certain account for a whole year, making it easier to compare different accounts and rates side-by-side.
ISA
An Individual Savings Account that lets you pay in a limited amount each year and save tax free. Cash, stocks and shares, or life insurance ISAs are available to UK residents over 18 (16- and 17-year-olds can get a mini ISA).
IFISA
An Innovative Finance ISA. Unlike other types of ISA, it contains peer-to-peer loans instead of cash, stocks and shares, etc.
Investment
Technically defined as ‘using money to purchase assets in the hope that the asset will generate income or appreciate over time’. In plain English: spending money to make money.
Savings account
An easy one: it’s a bank account for your savings. The bank pays you interest on the funds you deposit.
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