The annual equivalent rate (AER) shows the interest rate if it were paid and compounded annually. This would be before any tax deductions. In other words, the AER represents how much you could earn if you put your money in a savings account and didn’t touch it for a year.
A children's savings account is a type of savings account that can only be opened by, or on behalf of, a child under the age of 18.
Explore: Saving for children
Compound interest is when you earn interest on the interest you’ve already earned. You can earn interest on savings, but some forms of lending could also have the interest compounded.
Find out more about compound interest and how it’s calculated.
A deposit is where you put money into your savings account.
Instant access, also known as easy access, means you’ll be able to withdraw money from your savings account when you need to, without paying a penalty.
An independent service that protects your money if your financial service provider goes bust.
Your eligible deposits are protected up to a certain limit by the FSCS, the UK's deposit guarantee scheme.
A fixed rate savings account is where you lock away your savings at a set interest rate, for a set amount of time. The length of the fixed rate term can vary – it may be a period of time set by the bank, or you may be able to choose.
Make sure you won’t need to access the money in a fixed rate savings account as there may be a penalty for withdrawing money early.
Gross is the rate of interest paid before any tax (where applicable) has been deducted.
Help to Save is a government-backed scheme for people who are entitled to universal credit or working tax credits.
Find out more about Help to Save, and if you may be eligible.
For savings, interest is the amount you can earn on the money in your savings account. This can vary between different types of savings accounts, and banks.
You can also be charged interest for borrowing money, for example when you take out a loan.
ISA stands for individual savings account. There are different types of ISAs available, including cash ISAs and stocks & shares ISAs.
You won’t pay UK income tax on any interest you earn from your ISA, or capital gains tax.
Explore: What is an ISA?
A joint savings account is one that’s held by 2 people. Account holders will each be able to make deposits and withdrawals from the account.
The following HSBC savings accounts can be held in joint names: Flexible Saver, Premier Savings, Regular Saver and Fixed Rate Savings Account.
Eligibility criteria apply.
A notice period is an agreed amount of time you need to give before doing something. With some savings accounts, you’ll need to let the bank know in advance that you want to withdraw money. There may be a penalty, or you may lose interest if you take the money out immediately.
Per annum means annually, or once a year. It may also be called the annual equivalent rate (AER). For example, with savings, the interest is typically calculated each day – and then paid either monthly or per annum (annually), depending on your account.
A personal savings allowance (PSA) is the amount of interest you can earn on your savings without paying tax. Your personal savings allowance will depend on which tax bracket you’re in, for example, basic rate tax payers have a PSA of £1,000.
If the interest earned on your savings goes over your PSA, the tax owed can be collected in different ways, depending on your circumstances.
Interest earned from ISAs are not included in the PSA.
Find out more about the personal savings allowance.
A tax-free savings account means the interest you earn will be free from capital gains tax and UK income tax.
There are specific tax-free savings accounts, such as ISAs, which you could save into.
Variable rate means the rate of interest can change – so it can go up or down. Your bank will let you know if the interest rate will be changing.
Making a withdrawal, or withdrawing money, means you take money out of your account.
