The world of finance has some strange words and abbreviations which can often appear to be a completely different language. We have produced this Jargon Buster to help you to make dealing with financial matters as straight forward as possible.
A
AER
Is the Annual Equivalent Rate which illustrates what the interest rate would be if interest was paid and added each year.
B
Bacs
Bank automated Clearing System.
C
Capital
Your original investment.
Capitalised Interest
The interest your money has earned, which is added to your original investment.
CHAPS
Clearance House Automated Payment System. A Telegraphic Transfer system which allows you to make with drawals and deposits for your investment accounts.
Compound Interest
Interest earned on interest that has already been capitalised.
D
Deposit Account
An account which doesn't confer membership rights.
F
Financial Services Compensation Scheme
The Financial Services Compensation Scheme was established under the Financial Services and Markets Act 2000. Its purpose is to protect your investment should the Building Society become unable to repay it.
Form R85
An Inland Revenue form which non tax-payers complete in order to have their interest paid gross.
G
Gross Interest
Interest paid before the deduction of tax.
I
ISA (Individual Savings Account)
A tax efficient savings account, launched on 6th April 1999 as the replacement for PEPs and TESSAs.
Easy Access Account
An account which allows you to withdraw your money immediately without incurring penalties.
M
Maturity
The day when an account reaches the end of its term.
Maturity Value
Is the value of your capital and interest at maturity.
N
Net Interest
Interest paid once tax has been deducted.
Notice Account
An account which requires a specific period of notice before money can be withdrawn without penalties, usually 30, 60 or 90 days.
O
Offshore Investment
Investments held offshore.
S
Section 975 Certificate
Shows the amount of interest your savings account has earned and the amount of tax you have paid. It is provided on request.
Share Account
An account which confers membership rights in a building society.
Y
Year End
The end of the accounting year, usually when interest is paid. This is given in the product leaflet which was supplied at the time of application.
For investments with a year end of 1st January, the statements will be issued early in the month.