Savings Jargon Buster

We're here to make information accessible to everyone, so we've pulled together a few terms that may be unfamiliar to some and made them easy to understand.

Savings Jargon Buster

What is an ISA?

An ISA stands for Individual Savings Account which allows you to save up to £20,000 every year tax-free, this is known as your annual ISA allowance. You may only subscribe to one ISA per tax year.

There are 4 types of ISA:

  • Cash ISAs

  • Stocks and Shares ISAs

  • Innovative Finance ISAs

  • Lifetime ISAs

Currently, the Vernon only offers Cash ISAs.

For more information please visit: https://www.gov.uk/individual-savings-accounts

Who can have an ISA?

In order to open an ISA, you must be:

  • 16 or over for a cash ISA
  • 18 or over for a Stocks and Shares or Innovative Finance ISA
  • 18 or over but under 40 for a Lifetime ISA

You must also either be:

  • a resident in the UK
  • A Crown Servant (for example overseas diplomatic or overseas civil servant) or their spouse or partner if you do not live in the UK

Junior ISAs are available for children under 18.

What is an AER?

AER stands for Annual Equivalent Rate and illustrates the rate of interest a saver will receive over a year assuming the cash is left in the account for the full year.

What is a bond?

A bond is a type of savings account where money is put away for a fixed period of time with no withdrawals allowed until the account reaches the end of the fixed time period. This is sometimes known as maturity.

What is an Easy Access account?

In this type of account, you are able to make as many withdrawals as you require. Easy Access refers to how many withdrawals you are able to make from your account.

What is a Notice Account?

A Notice Account requires you to give us advanced notice of any withdrawals you intend to make. You may still withdraw funds without giving notice however an interest penalty will apply in these circumstances. Notice must be given in branch in the form of a printed receipt signed by yourself. The required amount of notice will vary depending on the account. This will be made clear in that product's specific account details under the section 'Can I withdraw money?'.

What is a Regular Saver Account?

A Regular Saver account requires you to make a deposit into the account each month, which will enable you to qualify for a higher rate of interest as long as the specific account T&C's are met. These usually require a minimum monthly deposit up to a maximum monthly deposit value to be made each month, together with a maximum number of allowed withdrawals within the year.

Who are the FSCS?

The Financial Services Compensation Scheme (FSCS) is the UK's statutory deposit insurance and investors compensation scheme for customers of authorised financial services firms. It protects customers of financial services firms if a firm fails. This means that the FSCS can pay compensation if a firm is unable, or likely to be unable, to pay claims against it. Under the FSCS compensation scheme, your savings are protected by the FSCS up to £85,000 for individual accounts and £170,000 for joint accounts. Some exclusions apply. More information can be found here.