Our Savings Glossary

You’ll see the phrase AER next to the interest rate on our savings products. It shows how much interest you'll earn on your savings over a year, including the effect of compounding. Compounding means you earn interest on both your original deposit and the interest that’s already been added. It's a useful way to compare different savings accounts.

 

All our savers receive an annual statement once a year in April or May. This shows the balance on your savings account(s) with us and any interest we have paid you up to 5 April. 

This is the amount of money currently in your savings account.

You might hear us talking about the Bank of England and the base interest rate when we talk about savings. It's the rate the Bank of England charges other banks and lenders to borrow money. This can therefore influence what many lenders charge for mortgages and offer to savers. When the Bank of England raises the base rate, rates on savings products usually rise too.

A bond is a savings product where you lock your money away for a set period of time, providing certainty of interest. See our range of fixed rate accounts, including bonds.

This is the money you put into your savings account.

A savings account that allows you to access your money whenever you wish. View our Easy access savings accounts.

The FCA ensures that financial services providers, including Coventry Building Society, operate fairly and transparently. The FCA protects consumers by making sure banks, building societies, and other financial institutions follow the rules.

The FSCS is a safety net for your savings. If the financial services provider you use goes out of business, the FSCS protects your money by compensating you up to a certain limit, ensuring your hard-earned savings are safe. Find out more about the FSCS.

This is the amount of interest earned on savings before any taxes are deducted.

Inflation is the rate which prices increase over time. With inflation, prices rise meaning that what you can buy with a pound today might cost more in the future. That’s why it’s so important to consider putting your money into an ISA, bond or other savings account to earn interest and grow your money.

Interest is what you earn on your savings for the money you hold in an account with us. How much you’ll earn depends on your account balance and on the rate of interest for the account you have. The higher the interest rate, the more your savings will grow. 

A tax-free way to save or invest. There are several types of ISAs, including Cash ISAs, Junior ISAs, Lifetime ISAs and Stocks and Shares ISAs.

• Cash ISA: A type of Individual Savings Account that allows you to grow the money you save in a tax-free way. With a Cash ISA, you can save up to £20,000 as part of the ISA tax-free allowance (or £9,000 for a Junior ISA)*. So, whether you’re saving for a new car, house or an experience such as an unforgettable holiday, you can grow your money without paying tax on the interest you earn.
• Fixed rate ISAs: With a fixed rate ISA, you choose to put your money away for a set period of time such as two or three years. The interest rate won’t change for this period, so you’ll know exactly how much interest you’ll earn.
• Variable rate ISAs: An ISA that has an interest rate which can change, but also allows you the flexibility to access your savings. Some products will still have certain restrictions on the amount of times you can access your cash, while others will have no restrictions.
• Flexible ISA: allows you to withdraw money and replace it within the same tax year without affecting your annual ISA allowance. This flexibility lets you access your savings when needed, as long as you return the funds before the tax year ends.
• Junior ISAs: A tax-free savings account designed specifically for children to help them start saving towards their future. With a Junior ISA, there is a tax-free allowance of £9,000 per year*. You’ll set up and have access to the savings account, which your child can then access when they turn 18.
• Lifetime ISA: An ISA designed to help people save for their first home or for retirement, with a government bonus added to their savings.
• Stocks and Shares ISA: An ISA where you can invest in the stock market, allowing you to invest in a wide range of companies and investment products.
• Additional Allowance ISA: An extra ISA allowance given to the spouse or civil partner of someone who has passed away. This allowance allows you to inherit and add to their own ISA savings, up to the value of your late partner's ISA, without affecting your personal annual ISA limit.

If you have an existing ISA with us, or if you have savings in an ISA with another provider that you want to move, you can transfer your ISA over to get the most out of your money. There are some limits on what you can transfer and you can find out more about these restrictions and the process on our ISA transfer help page.

A savings account where there are limits on how often you can withdraw money. These accounts can offer higher interest rates compared to accounts with easy access, but there are penalties if you dip into your savings beyond what is allowed. 

This is the amount of time you need to wait before you can withdraw money from a particular savings account. For example, if your notice period is 30 days, you must notify your bank or building society 30 days in advance before you can access your funds without a penalty charge.

The Personal Savings Allowance (PSA) is the amount of interest you can earn on any non-ISA savings each year without having to pay tax. This allowance makes it easier to grow your savings, as you can keep more of the interest you earn. For basic-rate taxpayers, the allowance is £1,000, while for higher-rate taxpayers it’s £500. For those paying the 45% rate, the PSA is reduced to £0.*

This refers to the percentage of interest your money earns over time. A higher rate means more interest added to your savings.

A savings account where you commit to saving a certain amount of money each month. 

A standing order is an instruction you give your bank or building society to pay a fixed amount of money to another account on a regular basis. You can control the amount and the schedule, making it useful for regular payments to a savings account.

This phrase is often used when financial services providers talk about savings where the interest earned is not subject to tax. This includes the £20,000 tax-free ISA allowance.*

The tax year is a 12-month period used by the government for tax purposes. In the UK, the tax year runs from 6 April to 5 April of the following year. It’s important to know about the 5 April deadline, especially for things like ISAs, as your annual ISA allowance resets after this date.

The length of time your money is locked away in a savings product, like a bond, or the duration of a fixed rate interest period.

When you take out money from your savings account, this is called a withdrawal.