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.