Savings Glossary

A

AER

Stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded each year.

 

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B

Bank Base Rate

This is the Bank of England base rate

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C

Capital

This is the amount of your investment – it does not include any interest

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F

Fixed Rate

Where the interest rate does not change during a specified term.

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G

Gross Interest

The interest paid before tax is deducted.

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I

ISA

Stands for Individual Savings Account. This type of account was launched in 1999 and benefits from interest paid without the deduction of tax. Specific regulations apply to ISA accounts, which are set out by the Government.

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N

Net Interest

Interest paid after tax has been deducted at the basic rate.

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R

R85 /Interest with no tax taken off form

This is the form that non tax payers fill in to receive gross interest on their account.

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S

Section 352 Certificate

This is a certificate to show the interest paid on an account during the tax year.

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T

Tax Free

This indicates that you will receive the interest without any tax taken off. Normally this would be relevant for an ISA account or a non taxpayer.

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