Glossary of terms

Feeling bamboozled? Get to grips with the language of ISAs with our glossary. Know the difference between everything from asset-backed to capital gain - you’ll be an expert before you know it!

R

Rate

A measure of money or time.

Real estate

Property.

Return

Financial gains made on an investment.

Revert-to rate (AER)

This is the interest rate that kicks in after an introductory bonus rate.

Risk

Doing something that may lose your money or deliver a high return.

S

Security trustee

The company that who holds the security interest created on trust for creditors.

Shares

Units of ownership within financial assets.

SIPP

Self-invested personal pension. This is a pension that you manage by yourself, contribute to, and choose the investments you want to make. Some ISAs allow you to invest your SIPP into the fund.

Stock exchange

The stock market, a market in which a percentage of public companies shares are bought and sold.

Stocks and Shares ISA

An individual savings account that invests money in the stock market. A Stocks and Shares ISA can have a varying degree of risk from cautious (lowest risk) to aggressive (highest risk).

T

Tax allowance

The amount of money you're allowed to earn before you begin paying tax.

Tax year

How much tax you owe and the tax allowance you are allowed is determined by a 12 month period referred to as a tax year.

Tax-free

Money you don't pay tax on.

Term

The term on your chosen ISA is the length of time you need to leave your investment to grow before you can access your funds.

Transfer

The act of moving money from one ISA to another.

V

Variable rate

An interest rate that changes over time.

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