Glossary of terms

Unsure about some of the terminology? Don't worry, we've put together a handy guide of all the terms to help you understand your savings


Annual Equivalent Rate - this illustrates what the interest rate would be if interest was paid and added each year.

Annual interest

Where interest is paid on your savings every year.

Base rate

The interest rate set by the Bank of England that influences savings and lending rates.

Cash ISA

Individual Savings Account - accounts designed to enable an individual to save without paying income tax on their savings.


A payment into your savings account.

Fixed rate

A rate of interest that is fixed for a period of time.

Fixed term

A period of time that money is saved for which is agreed on opening the account.


Gross interest is the contractual rate of interest payable (without deduction of tax) and you will be responsible for paying any tax you owe on interest as per your individual personal savings allowance.

Help to Buy: ISA

A type of savings account designed for people saving up for their first home. It's a Government scheme which provides an additional bonus subject to certain conditions being met.

Instant access

With this type of account, you can make withdrawals and transfers at any time without having to pay a fee or give notice.

Interest rate

This is the percentage return that you will receive on your savings. There are gross and tax-free interest rates, depending on the account that you have.

ISA allowance

The maximum amount you are able to deposit into your ISA over each tax year.

Monthly interest

Where interest is paid on your savings every month.


The amount of time you will need to wait between notifying us of your requirement to make a withdrawal and the withdrawal being processed, in order to avoid any incurring penalties.

Personal Savings Allowance

This is the amount of gross interest you can earn on your savings before having to pay tax. For further information on how the personal savings allowance works go to and search for personal savings allowance.


Tax-free rate of interest is the rate payable, under current legislation, where interest is exempt from income tax. (Your tax benefits will be lost if your ISA ceases to be tax exempt).


Some of our accounts have tiered interest rates, meaning you can earn a higher rate of interest depending on the balance in the account.

Variable rate

A rate of interest that may change over time.


When instructions are carried out to take money out of your savings account.