Get to know who we are, what we stand for, and the people leading the way.
Whether you’re a worst-case-scenario worrier or you’ve got a goal in mind, the right savings account can make all the difference.
Don’t know your APRs from your elbow? Compound interest got you confounded? Many people might be embarrassed to ask what a lot of these money terms mean – this is why we’ve made it so you don’t need to.
You don’t need to be an expert – that’s our job! – but to give you the confidence you need to make smarter, safer money decisions for yourself, we’ve put together a handy glossary covering everything you might need to know. Or, as we like to call it, thisbank’s This and That tool – named because THIS is what it means when we say THAT.
Short for Annual Equivalent Rate, this is how much money you’ll earn in interest on your savings account over a year.
Short for Annual Percentage Rate, this is the amount you agree to pay on anything borrowed (through a loan or a credit card, for example). The annual cost includes interest and other fees, and the higher the APR, the more you’ll pay.
Money that is owed and should have been paid earlier.
Something of value that you own, such as a house, car, or cash.
Bankers’ Automated Clearing Services – you’ll see this if you tend to use online payment methods.
When you move the money left owed (on a card or a loan) into another – often done because you can pay less interest or save money.
A personal budget is a simple plan that helps you keep track of your income and spending so you can feel more confident and reach your financial goals.
Presented by the Chancellor of the Exchequer, the Annual Budget is an overview of the UK economy and the government’s plans for public finances, which could impact your interest rates, VAT and more.
This is the rate of interest set by the Bank of England – you’ll hear about this if it changes as it could have an effect on your own loan or credit interest.
In simple terms, this refers to cash or any other valuable assets (like homes, a car or stocks).
A mortgage where the rate you pay each month is capped – or set – for an agreed period of time.
Stands for County Court Judgement. You might have a county court judgment against you if you owe someone money and a court ruled that you have to pay it back.
A way to send money from one bank to another very quickly in the UK. People use it when they need to move a lot of money on the same day, like when buying a house. It’s safe, fast, and usually for big payments.
Credit is the amount of money you can borrow now and pay back over an agreed amount of time, such as the credit limit given on a credit card or a loan
Your creditor is the person or company who loan you credit. You owe your creditor the money back.
Independent organisations that hold details about your credit history – borrowing, CCJs (County Court Judgement), etc – to inform lenders about your financial behavious to allow them to assess risk. In the UK, the main credit agencies include Equifax and Experian.
The legally binding time after taking out a loan or other financial service in which you’re allowed to cancel.
A Debt Relief Order (DRO) allows those eligible (owing £50,000 or less with limited income) to stop making payments on debts you owe for a set amount of time (usually a year).
Defaulting means you have missed or failed to make an agreed payment on time.
A Direct Debit is an instruction given to your bank that gives permission to a business to take payments from your account on an agreed date.
If you want to pay back a loan or another service early (after initially agreeing to pay back over a set amount of time) a lender might let you do this with an additional charge.
The amount of value you truly own in something you’ve bought, like a house or a car, after subtracting any loans or debts you still owe on it.
An electronic system that allows almost instant transfers of money between UK bank accounts.
The FCA Financial Services Register is an official public list of financial companies that are authorised or registered to operate in the UK.
It’s run by the Financial Conduct Authority (FCA), the UK body that regulates financial services. The register allows anyone to check that a company is genuine, who regulates them, and what financial activities they’re permitted to carry out.
Checking the FCA Register is a simple way for customers to confirm they’re dealing with a legitimate and regulated organisation.
Click here to review our FCA entry directly.
An interest rate on a loan or investment that does not change for the entire term.
A mortgage where the repayments are fixed for an agreed amount of time.
The regulatory body for financial services firms and financial markets in the UK.
Money given to a buyer for a property deposit, usually by a family member, with no requirement for repayment.
The amount of something before taxes or other deductions are taken out – ie; a gross salary or a gross repayment amount.
A third party who agrees to take on the responsibility for repaying a loan or mortgage if the main borrower fails to do so.
A type of search which will show up on your credit file and can have an impact on your credit score – for example, too many failed applications or searches can make you look risky to future lenders.
It’s a form that helps you (and us) understand your financial situation. You write down:
Income – all the money you receive (like wages, benefits, pensions).
Expenditure – all the money you spend (like rent, bills, food, travel). The aim is to see how much money you have left after paying for essentials.
This helps work out what you can realistically afford to pay towards your loan or debt without causing you hardship.
Interest earned is any money which a savings account or something like an ISA gains over time. Interest can also be owed on things like credit cards, making the amount you pay back higher than what you initially borrowed.
Subject to HMRC rules on tax-free allowances where applicable.
A UK tax-free savings and investment account.
Protection against a financial loss or liability.
An individual voluntary arrangement (IVA) is a contract or agreement between you and people you owe money to to pay back your debts over an agreed length of time.
A mortgage taken out by two or more people, who are all jointly and separately responsible for the repayments.
A tax-free savings account for children under 18.
When you’re late paying back an agreed repayment schedule – this can land you with a fee or a penalty, which is why experts often suggest setting up a Direct Debit to avoid forgetting
The financial institution (bank, building society, etc.) that loans money.
This can mean anything someone owes – money, repayments, etc.
When referring to a loan or financial service, it refers to the final proposed date or something coming to an end.
This is how much you agree to pay a lender back – missing this can result in extra payments, and only sticking to minimum repayments might leave you with higher interest to pay back.
A longer-term, usually larger loan from a bank or other lender to buy a home that’s paid back over many years.
The amount paid to the lender each month, covering part of the capital and the interest.
When the money you have to repay on an asset (like a car or a home etc.) is more than how much the current market value is. For example, when the money left to repay on a mortgage is greater than the current market value of the property.
A financial amount remaining after taxes and other deductions have been taken out – Net comes after Gross.
In terms of a savings account, this is when you agree to give a set amount of days’ notice before you can access your money. For example, a 90 day notice account means you have to give 90 days notice before taking out your money. These savings account usually come with a higher interest rate, meaning you can make more money on the cash you leave in the account.
When a lender or organisation allows a borrower to use money they don’t currently have – ie the overdraft on a debit card means you can spend money not currently in your account.
Making extra payments on a mortgage or loan above the required minimum, to reduce the capital and overall interest paid.
A lender can agree to let you pause repayments for an agreed amount of time. But just note that it could impact your credit score.
A rebate is a refund of some of the interest you would have paid if you kept your loan for the full term. So, if you pay off your loan early, you might get some money back because you’re no longer using the loan for as long as originally planned.
Switching your existing mortgage to a new deal, either with the same lender or a new one, when your fixed rate period comes to an end.
Paying off a mortgage or loan in full, completing the debt obligation.
The default mortgage interest rate a lender charges. It is usually higher than introductory rates and is what your mortgage reverts to once a fixed or discounted deal ends.
A credit check that doesn’t show on your credit report/history.
A standing order is a regular payment of the same amount on a specified date that you set up yourself, allowing the bank to take money from your account.
The total length of time (e.g., 25 years) over which a loan or mortgage is scheduled to be repaid.
A loan that is not backed by an asset.
An interest rate that can fluctuate (go up or down) over time, as opposed to a fixed rate.
Tax in the UK added to the price of most goods and services.
A formal agreement (such as an Individual Voluntary Arrangement – IVA) with creditors to repay debts over a set period.
Taking money out of a bank or savings account.
Some savings accounts might set a limit on how much you can take out, or how many times you can request money out, over a set period of time.
