In this section

Jargon Buster

A

Account balance

This is the amount of money in an account. This could be a credit balance (money you own) or a debit balance (money you owe, for example an overdraft on a current account).

AER

AER stands for the Annual Equivalent Rate and shows what the interest rate would be if interest was paid and added to the capital balance each year. The higher the AER, the better the return you will receive.

Assets

Assets are things that a person or company owns, such as a house or money.

ATM

ATM stands for Automated Teller Machine. They are known as cash machines and can be found in many public places. They allow you to check your balance and take out money from your current account by using your cash or debit card and entering your PIN (Personal Identification Number).

B

BACS

This means Bankers’ Automated Clearing Services and it’s simply a way to electronically process financial transactions. It is a UK scheme and there are also BACS Direct Debits and BACS Direct Credits.

Balance

This is the amount of money in an account. A positive balance refers to the amount you have in your savings account. A negative balance refers to the amount you owe, for example an overdraft on a current account.

Bank of England Base Rate

By Bank of England Base Rate we mean the Bank of England’s official dealing rate (the Official Bank Rate) as set by the Monetary Policy Committee.

Beneficiary

A beneficiary is an individual that has the right of enjoyment from the funds in the account and this remains with them throughout the period the money is deposited.

Bonds

A bond is a savings account which will earn a fixed rate of interest over a set period of time. Bond terms can vary usually between 1 to 5 years and the longer the term the higher the rate of interest tends to be. Learn more about Fixed Rate Bonds

Budget

A budget is a financial plan drawn up for an individual or family to work out how much money is coming in and going out each month. A budget would usually cover a period of one month, although it can be longer. You can use our budget planner to work out what you can afford.

C

Capital

This is the amount of money saved or invested in your savings account.

Cash ISA

An Individual Savings Account (ISA) is a savings account where you don’t pay tax on the interest you earn. As your earnings are tax-free, this means you get to keep everything that you invest and earn.

There are four different types of ISAs: Cash ISAs which are available to people aged 16 or over, Stocks and Share ISAs and Innovative ISAs which are available to those aged 18 years and over. And Lifetime ISAs available to people aged between 18 - 40. At Virgin Money we currently offer a range of Cash ISAs and Stocks and Shares ISAs.

Cash ISA allowance

Each tax year, everyone aged 16 and over in the UK gets an annual tax-free ISA allowance of £20,000. And the tax year runs from 6 April to 5 April the following year.

With an ISA you can save money as cash (in a cash ISA), invest in the stock market (in a Stocks & Shares ISA), lend your money to other individuals or companies as a loan (in an Innovative ISA), or save towards your first home and/or retirement (in a Lifetime ISA) or any combination of the four. This is based on HM Revenue and Customs UK taxation law and practice which may change.

An ISA, or Individual Savings Account, allows you to invest up to £20,000 each tax year without you having to pay a penny of tax on any interest or gains you make.

You can only subscribe to one of each ISA type, Cash ISA, Stocks & Shares ISA, Innovative Finance ISA and Lifetime ISA (maximum £4,000) in each tax year, up to the combined annual subscription limit of £20,000.

Here at Virgin Money, we have a range of Cash ISAs and Stocks and Shares ISAs for you to choose from. We don’t currently offer Innovative ISAs or Lifetime ISAs.

Read more about flexible ISAs 

Cash ISA top up

There are limits on the amounts you can 'top up' or invest each tax year. An ISA may become void if invalid contributions are made and we may transfer the account to a non-ISA account which may not pay the same interest rate as the current ISA. Once you have reached your maximum investment limit for any tax year you will not be able to deposit more money after making withdrawals unless you have a Flexible ISA. Read more about Flexible ISAs.

Certificate of deposit

A Certificate of Deposit is provided to you when you open a Fixed Rate Bond or Fixed Rate Cash ISA with us. This will detail information such as your account number, balance and the interest rate for your fixed term.

CHAPS

This stands for Clearing House Automated Payment System. It is an electronic payment system which provides for same-day transfers of funds between accounts. CHAPS is a chargeable service so please refer to the charges section for further information.

Charges

When we talk about charges, it means expenses that are incurred for a service we provide. For example, if you need a copy of your Savings or Current Account statement, then charges may apply.

Citizens Advice Bureau

A voluntary organisation offering help to resolve legal, money and other problems by providing free information and advice.

Compound interest

Interest that is calculated on the original amount saved, as well as any interest already earned.

Cooling-off period

This is the time you have to change your mind on any savings accounts you have opened, excluding Fixed Rate Bonds.

Credit check

This is where a bank or other organisation carries out a credit check on a person before deciding whether to lend them money or to open a bank account.

D

Debit card

This plastic card will be provided with your Current Account, to enable you to use ATMs (cash machines) to check your balance and withdraw cash, as well as making purchases in shops, restaurants and petrol stations, for example. If sufficient funds are available in your account, the transaction will usually be approved immediately and your account balance will be updated.

Debt

This is money you owe to another individual or a business.

Dependant

This is someone who relies on another person for financial support. So if you have young children, they are your dependants.

Depositor

This is someone who puts money into a savings or bank account.

Direct debit

This is an instruction that someone gives to their bank, allowing another company or organisation to take a specific amount from their account on a regular basis. Direct Debits are usually taken from an account on a monthly basis but can be annual or twice yearly.

E

Easy access

An easy access account is a savings account which offers you the flexibility of adding to your savings as often as you like with the benefit of being able to take money out as you need to. Some of these accounts are operated online for 24/7 access to your funds. Learn about Easy Access accounts.

Easy access accounts

Operated either online, in Store by telephone or post. These account are great if you want the flexibility of being able to save as and when you want to.

Estate

Your estate is everything you own when you die, less what you owe.

Expenditure

This is the amount of money spent on goods or services, usually calculated over a month.

F

Financial gifts

This is money given to someone as a gift, for example, money added to a child’s account from a parent or relative.

Financial Ombudsman Service (FOS)

This is the official independent complaints service which works to resolve complaints between consumers and businesses that provide financial services. If we cannot resolve the complaint to your satisfaction you have the right to refer your complaint to the Financial Ombudsman Service.

Financial planning

This is a service which helps customers to work out the best accounts and financial arrangements to suit their specific needs. We offer our customers a thorough review with a fully qualified financial consultant who knows exactly what’s what.

Financial Services Compensation Scheme (FSCS)

The FSCS can pay compensation to depositors if a bank is unable to meet its financial obligations. Most depositors are covered by the scheme. And here at Virgin Money we are covered by the Financial Services Compensation Scheme (FSCS).

Fixed Rate

An interest rate that stays the same for a set period of time i.e. it doesn't move up or down within a set period of time.

Fixed Rate Bond

A Fixed Rate Bond is a savings account that pays a fixed rate for a fixed term. These types of savings accounts tend to offer a higher rate of interest than easy access accounts as you are unable to access your funds during the fixed term. Virgin Money currently offers a range of Fixed Rate Bonds with varying terms. Learn more about Fixed Rate Bonds.

Forecast

This is usually an estimate of future financial outcomes.

FPS

This stands for Faster Payments Service and it enables customers to send funds electronically between financial institutions quickly. Faster payments are available on all online accounts and can be initiated by the customer. We also offer Faster Payments on some postal, Store and telephone based accounts which we will initiate on behalf of the customer. The Key Product Information will detail if a specific product has this service available.

FTSE 100 Index

This stands for the Financial Times Stock Exchange 100 Index, which is made up of the 100 largest firms quoted on the London Stock Exchange.

G

Gross

The full amount of money earned or paid before any deductions such as tax.

H

HM Revenue & Customs

HM Revenue & Customs (HMRC) is a government organisation that ensures the correct tax is paid at the right time, whether this relates to payment of taxes received by the department or entitlement to benefits paid.

I

Income tax

This is tax which is payable on any income you earn.

Independent Financial Advisor (IFA)

A professional who is authorised and regulated by the FCA to advise on suitable financial products after researching the whole market and a customer’s needs and circumstances.

Inheritance tax

Inheritance tax may be payable in the event of death if the estate is over the threshold specified for that tax year.

Interest

This is the money that you earn on a credit balance (e.g. money in your savings account), or the money that you are charged on a debit balance (e.g. an overdraft).

Interest rate

The percentage figure used to calculate how much interest you earn on a credit balance, or how much you are charged on a debit balance.

Introductory bonus

On certain accounts, an introductory bonus may be included within the interest rate. This is available for a fixed term, usually twelve months from you opening the savings account.

ISA

An Individual Savings Account (ISA) is a savings account where you don’t pay tax on the interest you earn. As your earnings are tax-free, this means you get to keep everything that you invest and earn.

There are four different types of ISA: Cash ISAs which are available to people aged 16 or over, Stocks and Share ISAs and Innovative ISAs which are available to those 18 years and over. And Lifetime ISAs which are available to people aged 18-40. At Virgin Money we currently offer a range of Cash ISAs and Stocks and Shares ISAs.

L

Limited access

A limited access account is a savings account which could earn you a higher rate of interest by giving us notice when you wish to withdraw. Usually with a variable interest rate, a limited access account gives you the flexibility of adding to your savings when you like. Learn about Limited Access accounts.

Limited issue

Some savings products, such as Fixed Rate Bonds, are limited issues and therefore will only be available for a short period of time. And this means that they can be withdrawn from market without notice.

M

Maturity

If you open a fixed rate account, such as a Fixed Rate Bond or a Fixed Rate Cash ISA, at the end of the fixed term the account 'matures' and you will be presented with further options.

N

Notice period

This is the time you have to give to notify the bank or building society that you want to withdraw your money without paying a penalty. 60 , 90, 120, 180 days are common notice periods.

O

Overdraft / Overdrawn

A facility allowing you to spend more money from your bank account than you have in it. The bank will usually charge you interest and sometimes other fees as well if you do this.

P

P60

An annual summary of all your payslips. Your employer gives you one at the end of every tax year, if you still work for the employer. Keep it safe.

Payslip

A payslip shows how much you've been paid by your employer and also how much tax you've paid. Your employer should give you one every time you get paid.

Pension

This is a private or public financial plan which provides you with an income when you retire from work.

Power of Attorney

A written legal document that gives an individual the authority to act for another person.

Provider

This is the company or organisation that provides the account.

Prudential Regulation Authority (PRA)

This is one of two regulators responsible for regulating financial services in the UK and works alongside the Financial Conduct Authority (FCA) (see also Financial Conduct Authority (FCA)).

R

Rate

The numerical figure that shows you how much interest you earn on a product, for example 1.50%.

S

Sole account holder

A sole account holder is where a savings or current account only has one account holder named on the account.

Standing Order

A Standing Order is an instruction someone gives to their bank to pay a set amount at regular intervals to another account. This is also known as a Banker's Order.

Statement

This shows details of all transactions on your account. This can be on paper or viewed online if you have an online account. Statements are usually available at all times online and are sent out to your personal address at specific times for offline postal accounts.

Summary box

A summary box is the key product information about a savings account.

T

Tax

A charge you pay to the government – there are different types of tax but income and inheritance tax are the ones most people may be aware of.

Tax free

This simply means that you don’t pay tax. For example, with a tax-free Cash ISA, you don’t pay tax on any interest you earn.

Tax year

A tax year runs from 6th April one year until 5th April the following year.

Tax year for Cash ISAs

A tax year runs from 6 April one year until 5 April the following year. The current ISA subscription limit is £20,000 for the 2017/2018 tax year.

Term

The term is the period of time your investment runs for, for example three years.

Trustee

A trustee is someone who is appointed to hold the funds in the account for the benefit of the beneficiary.

V

Variable

Interest rates offered by banks and financial institutions on loans or deposits which are liable to change according to circumstances. For example, a movement in the Bank of England Base Rate which is set by the Monetary Policy Committee.

W

Welcome pack

If you open an account online, via phone or post we will send you a postal ‘welcome pack’ which includes all of your account details. And if you open an account in one of our Stores, then you won’t receive a postal welcome pack as you will receive all of the account information whilst you’re in-Store.

Withdrawal

A withdrawal simply means to take money out of an account.