Savings accounts

Please note, for Shariah-friendly accounts interest is replaced by expected profit. The notes below apply to both interest and profit.

What does AER mean?

• We show the interest / expected profit rate as an AER, which stands for Annual Equivalent Rate

• This shows what you’d get over a year if you put money in the account and left it there.

• It helps you decide between different accounts, by adjusting for the differences between them so you can compare them on a like-for-like basis.

How much interest / expected profit will I actually get?

• This will depend on a few things:

• How much you deposit

• How long you leave it in savings

• The rate (and any changes in the rate if it’s variable)

•  How often the interest / expected profit is compounded (the more frequently, the more you’ll get)

What is compound interest / expected profit?

• Compound interest / expected profit is when you earn money on your savings – then go on to earn more on that total.

• So, over time, you are earning interest / expected profit on your original savings but also on the interest / expected profit itself.

• This keeps happening, meaning the amount you’ve saved gets bigger and bigger.

• For example:

    - You start out with £1,000 in your savings and a rate of 5%, which is compounded annually

    - In the first year, you’ll earn £50, bringing your total to £1,050

    - In the second year, you’ll earn interest / expected profit on £1,050 which is £52.50, bringing your total to £1,102.50

    - With each year that passes, your interest / expected profit gets bigger and bigger, even if the rate stays the same.

Please note, for Shariah-friendly accounts interest is replaced by expected profit. The notes below apply to both interest and proft.

What does AER mean?

• We show the interest / profit rate as an AER, which stands for Annual Equivalent Rate

• This shows what you’d get over a year if you put money in the account and left it there.

• It helps you decide between different accounts, by adjusting for the differences between them so you can compare them on a like-for-like basis.

How much interest / profit will I actually get?

• This will depend on a few things:

• How much you deposit

• How long you leave it in savings

• The rate (and any changes in the rate if it’s variable)

•  How often the interest / profit is compounded (the more frequently, the more you’ll get)

What is compound interest / profit?

• Compound interest / profit is when you earn money on your savings – then go on to earn more on that total.

• So, over time, you are earning interest / profit on your original savings but also on the interest / profit itself.

• This keeps happening, meaning the amount you’ve saved gets bigger and bigger.

• For example:

    - You start out with £1,000 in your savings and a rate of 5%, which is compounded annually

    - In the first year, you’ll earn £50, bringing your total to £1,050

    - In the second year, you’ll earn interest / profit on £1,050 which is £52.50, bringing your total to £1,102.50

    - With each year that passes, your interest / profit gets bigger and bigger, even if the rate stays the same.

Please note, for Shariah-friendly accounts interest is replaced by expected profit. The notes below apply to both interest and proft.

What does AER mean?

• We show the interest / profit rate as an AER, which stands for Annual Equivalent Rate

• This shows what you’d get over a year if you put money in the account and left it there.

• It helps you decide between different accounts, by adjusting for the differences between them so you can compare them on a like-for-like basis.

How much interest / profit will I actually get?

• This will depend on a few things:

• How much you deposit

• How long you leave it in savings

• The rate (and any changes in the rate if it’s variable)

•  How often the interest / profit is compounded (the more frequently, the more you’ll get)

What is compound interest / profit?

• Compound interest / profit is when you earn money on your savings – then go on to earn more on that total.

• So, over time, you are earning interest / profit on your original savings but also on the interest / profit itself.

• This keeps happening, meaning the amount you’ve saved gets bigger and bigger.

• For example:

    - You start out with £1,000 in your savings and a rate of 5%, which is compounded annually

    - In the first year, you’ll earn £50, bringing your total to £1,050

    - In the second year, you’ll earn interest / profit on £1,050 which is £52.50, bringing your total to £1,102.50

    - With each year that passes, your interest / profit gets bigger and bigger, even if the rate stays the same.