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Confusing savings jargon?
Find out what some of the more complex financial words and phrases mean, easily explained.If you can't find a specific word or term in our glossary below but want to know more about what it is, then please call our friendly team on 03300 244612 who will be pleased to help.
A
Access charge
This is a charge that is sometimes applied, usually if you need earlier access to your money than permitted within the terms and conditions of certain savings accounts.
Additional Permitted Subscription
This allows you to inherit ISA savings from your spouse or civil partner when they pass away, keeping the savings in a tax-free status. This allowance would be in addition to your individual annual ISA subscription allowance. Please refer to our website at familybuildingsociety.co.uk/savings-faqs for more information.
Annual Equivalent Rate (AER)
This is used to show you what you would earn in interest from your savings over a year as a percentage. The AER always assumes any interest earned from your savings is compounded.
Annual interest
This is when interest on your savings is paid yearly.
B
Bank of England Bank Rate
The rate of interest that the Bank of England charges financial institutions to borrow money from them. This ‘Bank Rate’ often influences the interest rates that providers charge for mortgages and pay to their savers. The Bank of England review this ‘Bank Rate’ eight times each year.
Beneficial owner
This is the person who ultimately owns or controls the savings account.
Bond
A bond is a type of fixed term savings account where your money is locked away for the set period specified. No withdrawals can be made until the end of the term. These accounts are best suited to customers that won’t need to access their money and don’t need the flexibility of an easy access account or a notice savings account.
C
Cash Individual Savings Account (ISA)
A tax-free savings account of that allows you to save money without paying Income Tax on your savings. There are four different types of ISA. At Family Building Society we only offer Cash ISAs.
Capital Gains Tax
A tax on the profit or gain you make when you sell or dispose of an asset. You can receive gains of up to the value of £12,300 before you have to pay Capital Gains Tax.
Compound Interest
This is interest that is applied to interest previously added to your savings. For example, if you put £1,000 in your savings account at an annual interest rate of 4.0% AER, you would earn £40.00 after one year. In the second year, you would then earn interest on £1,040, earning £41.60 (4.0% AER of £1,040.00), taking your total to £1,081.60.
D
Deposit
This is any payment into your savings account. Please refer to your savings account’s Summary Box flyer and within this Product Features leaflet for more information on how to make payments into your accounts.
E
Easy access account
Our easy access accounts allow you to withdraw your money without notice, however withdrawals are not instant. We do not offer instant access accounts that allow you to withdraw money immediately.
Electronic payment
An electronic or digital way of transferring funds.
F
Fixed interest rate
When the interest rate for a savings account stays the same for a set period of time.
Fixed rate term (Bond / ISA)
The amount of time your interest rate stays the same for i.e. 1 year.
Flexible ISA
An ISA that allows you to take money out of your savings account and put it back it within the same tax year without it affecting your ISA allowance.
Financial Services Compensation Scheme (FSCS)
All of your savings are FSCS protected up to £85,000. This protects you from losing some or all of your cash if the authorised financial services firm(s) you keep your money with goes bust.
Funding cut-off date
The date at which no more money can be paid in to the account. Any money which has been withdrawn from the account cannot be replaced.
G
Gross interest rate
The amount of interest you’ll get on your savings before paying any tax.
H
His Majesty's Revenue and Customs (HMRC)
A Government department that is responsible for collecting taxes such as Income Tax, Capital Gains Tax and Inheritance Tax to make sure that money is available to fund the UK’s public services. It also administers National Insurance and State benefits. They also help families with targeted financial support.
I
Initial deposit
This is the first payment made into your savings account. Additional deposit rules vary depending on the savings account you hold with us. Please refer to your savings account’s Summary Box flyer and within this Product Features leaflet for more information.
Interest rate
This is how much you will earn on your savings account as a percentage amount.
Investment
The amount of money that is placed into a savings account.
ISA allowance / ISA subscription limit
The limit on how much money can be put into an ISA in any tax year, without having to pay any tax on your earnings. For more information on current ISA allowances please refer to gov.uk/individual-savings-accounts
J
Joint account
A savings account shared by two or more individuals.
Junior Individual Savings Account (Junior ISA)
A tax-free, long term savings account for children. The account is opened and operated on behalf of a child by a person with parental responsibility. Children who are 16 or 17 years old may open and operate a Junior Cash ISA on their own behalf.
M
Maturity (Bond/ISA)
When the named child on the Junior Cash ISA turns 18, the money ‘matures’ and will automatically transfer the available issue of our Market Tracker Cash ISA.
Monthly interest
This is when interest on your savings is paid monthly.
N
Nominated bank account
Is the current account that you link to your savings account with us. All nominated accounts must be UK accounts, named in sterling (£) and must be in your name (if the account is a joint account the nominated bank account may be in the name of either account holder).
Notice account
A type of savings account that allows withdrawals, without any charges, but requires a notice period before you can withdraw your money. The notice period required before you are able to make a withdrawal will vary depending on the account.
For example, a 35 Day Notice Saver account requires 35 days notice before making a withdrawal.
O
Online Service
Our easy to use online banking system allows you to view and manage most of your savings accounts anytime and anywhere. You can also send and receive secure messages, update your personal details, and apply for many of our savings accounts without a paper application form. To find out more or to register, please visit familybuildingsociety.co.uk/new-online
P
Passbook savings account
A savings account that comes with a book that we may provide to you, to record your account activity. For example, our Branch Saver requires a passbook for all transactions.
Personal Savings Allowance (PSA)
Personal Savings Allowance (PSA) – The total amount of interest you can earn each tax year across all of your bank accounts (excluding ISAs) without paying any tax. For more information on your PSA please refer to gov.uk/apply-tax-free-interest-on-savings
Power of Attorney
A legal document which lets you give permission to one or more people (known as ‘attorneys’) to help you make decisions or make them on your behalf.
S
Savings Account Certificate
This is sent to you after you have opened your savings account with us. It contains your account information and is confirmation of your initial deposit.
Self-assessment
A system which HMRC uses to collect Income Tax. Tax is usually deducted automatically from your pay, pensions and savings, but if you have other income, it is your responsibility to report it in a self-assessment tax return.
Summary Box flyer
This is a summary of the key features of your savings account. This is included within the product pack along with a Product Features leaflet and the General Conditions for our Savings Accounts booklet.
T
Tax-free savings account
A type of savings account that lets you earn interest on your savings without paying tax on the interest that you earn.
Tax year
The period over which taxes and benefits are calculated. The year used by the Government for calculating personal taxes is April 6 to April 5. Other organisations, such as companies, may use different periods for their tax year.
Term
The amount of time you choose to lock your money away for i.e. 1 year.
Tiered interest rate
This means that interest rate will depend on the amount of funds held in your savings account. Normally, the higher the balance, the higher the interest rate.
Tracker Rate Bond
A type of savings bond where the interest rate tracks the Bank of England Bank Rate.
V
Variable interest rate
The interest rate you receive on variable interest rate accounts could go up or down. We will notify you of any rate changes in accordance with the General Conditions for our Savings Accounts leaflet.
W
Withdrawal
When you remove money from your savings account. Please refer to your savings account’s Summary Box flyer and this Product Features leaflet for more information on how to make withdrawals from your account.
See our helpful money guides
From looking after your money to planning for future life events such as saving for children or higher education, our useful guides can help and support you along the way.
Try our mortgage guides
Buying a new home is complex so we've got a variety of guides to help you, including stamp duty, first time and later life borrowing, plus specific questions about certain circumstances.