Dictionary - Savings and Investments

Other Dictionaries


Annual Equivalent Rate (AER)

A notional rate which illustrates the contractual rate (excluding any bonus interest payable) as if interest is paid & added to the account on an annual basis.

Capitalisation of interest

Interest your money has earned that's added to your account or designated account.

Appraisal of an applicant's financial standing

Finding out about your financial situation.

Equity Bond

An investment account which lasts for a fixed term. The return on the account is linked to one or more stock markets.

Financial Times Stock Exchange Index (FTSE 100 or "Footsie")

An index listing the share prices of the 100 largest companies listed on the London Stock Exchange.

Form R85

A HM Revenue and Customs form which you have to fill in if you want us to pay the interest your money earns gross.

Gross Interest

The interest that is applied to savings accounts before any tax is deducted.

Instant access account

A savings account which allows you to withdraw your money immediately without losing any interest.

Membership rules

To open one of our members' products you must, at the date of account opening, have had one of the following qualifying accounts with Nationwide for at least three years:

Please note that the following accounts do not qualify: credit card, general insurance and any other account held with any of the Society's subsidiaries such as Nationwide Life, Nationwide Trust and Nationwide International.

Net Interest

The interest that is applied to savings accounts following the deduction of income tax.

Notice account

A savings account which specifies a number of days' notice - e.g. 60 or 90 which you have to give before you can withdraw money. You can withdraw your money immediately but you lose interest on the amount withdrawn equivalent to the notice period. Some accounts have special access facilities so you can withdraw your money without losing interest in certain circumstances.

Section 352 Certificate

A certificate we can give to you which shows the amount of interest the money in your savings account has earned and the amount of tax you have paid.

Tax Exempt Special Savings Account (TESSA)

A five year savings account, with annual limits on how much you can invest. Tax is not deducted from the interest your money earns. Tessas were withdrawn by the Government in April 1999 and are no longer available to new investors.

Tax-free interest

Interest you receive which is not liable for tax - usually because the account holder isn't a taxpayer or because the account is exempt from tax (e.g. ISAs).

Tiered interest rates

The interest rate you receive depends on the balance in your account. When the balance goes beyond a certain level, your entire balance automatically earns interest at the higher rate. Alternatively, if a withdrawal takes your balance below a certain level, your entire balance earns interest at the lower rate.


ISA Jargon

ISA

Individual Savings Account (ISA) - is a way of saving or investing, tax-efficiently. You can save in cash or invest in stocks and shares (equities) or a combination of both.

Under the Government's ISA scheme there are two kinds of ISAs: Mini and Maxi ISAs

You can only invest in one kind of ISA in any one tax year - so if you open or invest in a Mini ISA this year, even with as little as £1, you cannot open a Maxi ISA this tax year. You'll have to wait until the next tax year to take out a Maxi ISA.

ISA Investment Limits

You can subscribe up to £3,000 into a Mini Cash ISA every year. On top of this, you can subscribe up to a further £4,000 in a Mini Equity ISA. Alternatively, if you decide not to invest in cash you can invest up to £7,000 in a Maxi ISA.

Maxi ISA

Where you put all your annual ISA allowance into one account with one fund manager or provider. It'll normally be a stocks and shares account (also known as equities), though some Maxi ISAs let you put some of the money into cash. Nationwide offers a range of stocks and shares Maxi ISAs, although you cannot hold cash in them.

Mini ISA

Where you can open up to two separate ISAs: one for cash up to £3,000, and one for stocks and shares up to £4,000. Each of these can be managed by different fund managers, giving you the freedom to choose the best ISA for your needs. Nationwide offers a choice of Mini Cash ISAs, comprising Instant Access ISA and Members' ISA Bond, as well as a range of stocks and shares ISAs.