Hi lovebugs,
So sometimes sorting out our finances is boring, long and quite frankly daunting. Money is a resource that we all want and need. However do not be a slave to your finances, take control and become a master. You are never too young to start! Below are some basic and random jargon busters for anyone who is to shy to ask what they mean.
ACCOUNT - This is what banks and Building societies use to hold your money in. There are basic accounts which allow you to deposit and withdraw money but don't include fancy things like overdrafts. There are current accounts which you can use everyday to manage your money, these will have the option of an overdraft. There are savings accounts which you can use for money you would like to save.
AER- Annual Equivalent Rate shows what the interest rate would be if the interest on your savings were paid and added to your savings at the end of each year. The higher this is , the better the return on your savings are.
It's basically being rewarded for keeping your money in your savings account, whilst the bankgambles with it invests it :) lol
APR- Annual Percentage Rate tells you the cost of a loan. It includes the interest you'll pay and any possible charges (e.g late re-payments). It can be used to compare the cost of one loan with another. Loans aren't free so obviously there is a cost. The higher the APR the higher the cost to you.
INTEREST RATE- This is the % paid on savings or loans. For example Borrowing money at 20% would cost you more than borrowing money at 5%.
ISA - Individual Savings account are accounts which have a maximum amount you can invest each year, this is set by the government. You can open a cash ISA or a stocks and shares ISA
And there you have it, these were the ones that came to mind. I'm not a money expert or anything finance industry related, I just like to educate myself in areas I need to improve on. Did you like the post, should I do another like this?
So sometimes sorting out our finances is boring, long and quite frankly daunting. Money is a resource that we all want and need. However do not be a slave to your finances, take control and become a master. You are never too young to start! Below are some basic and random jargon busters for anyone who is to shy to ask what they mean.
ACCOUNT - This is what banks and Building societies use to hold your money in. There are basic accounts which allow you to deposit and withdraw money but don't include fancy things like overdrafts. There are current accounts which you can use everyday to manage your money, these will have the option of an overdraft. There are savings accounts which you can use for money you would like to save.
AER- Annual Equivalent Rate shows what the interest rate would be if the interest on your savings were paid and added to your savings at the end of each year. The higher this is , the better the return on your savings are.
It's basically being rewarded for keeping your money in your savings account, whilst the bank
APR- Annual Percentage Rate tells you the cost of a loan. It includes the interest you'll pay and any possible charges (e.g late re-payments). It can be used to compare the cost of one loan with another. Loans aren't free so obviously there is a cost. The higher the APR the higher the cost to you.
INTEREST RATE- This is the % paid on savings or loans. For example Borrowing money at 20% would cost you more than borrowing money at 5%.
ISA - Individual Savings account are accounts which have a maximum amount you can invest each year, this is set by the government. You can open a cash ISA or a stocks and shares ISA
And there you have it, these were the ones that came to mind. I'm not a money expert or anything finance industry related, I just like to educate myself in areas I need to improve on. Did you like the post, should I do another like this?
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