The key savings terms you need to know

If your budget leaves you a little to save each month, it would be a real shame to let those insider savings terms put you off. Here’s a quick guide to the jargon around saving – from the experts at LOQBOX.

 

  • AER. The Annual Equivalent Rate 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.

 

This post was written and compiled by the credit experts behind LOQBOX – a completely free way to build your credit history by saving a little each month. To sign up or read more about the clever way LOQBOX works, head to LOQBOX.co.uk.

This is part of our Two-minute Money blog series – unlocking the secrets of the financial system, two minutes at a time.

Build your credit history

by saving as little as £20 per month.

Recommended Posts