Savings Account Terms and Jargon Buster

Confused by Complicated Savings Jargon?

While you’re looking for the best savings account to suit your investment needs and ability to save, you may find yourself bombarded by complicated jargon that needs a bit of explanation. 

It’s important to understand all of the terms and conditions of each savings product to find a savings account that suits your goals and resources. 

To help you better understand these terms, Bank of Ireland offers clear descriptions and definitions of the most used phrases associated with savings accounts and earning interest:

Demand Account

A Demand Account is Bank of Ireland’s easiest most convenient savings account, which earns a variable interest rate, has no minimum or maximum savings limits and no limits on cash access to the account.

Deposit

This is money you hold in a savings or deposit account at a financial institution that earns interest.

Deposit interest retention tax (DIRT)

This is a tax you pay on any interest you earn for money deposited in a financial institution. Most financial institutions automatically take it from the interest it pays to your account and pass it over to the Revenue Commissioners. Check the Revenue site for current rates.  

Deposit protection scheme

This is a scheme designed to compensate depositors, when a bank, building society or credit union fails, subject to certain limits.

Annual Equivalent Rate (AER)

AER shows you what the interest on a savings account would be if the interest was compounded and paid out to you each year (instead of monthly or over any other period). You may earn less than AER because your money may not be invested for as long as a year.

Financial advisor

A regulated financial advisor is someone who is authorised by the Central Bank to give advice to individual members of the public.  Advisors can either be ‘tied' and only able to advise on the products of their employer or they can be ‘independent' and able to advise on a range of providers and products.  It is important when selecting an advisor that you understand how they are being paid for the advice that is being given to you and what impact any commission being paid will have on your pension or investments. You can use the Central Bank's registers site to get a list of authorised advisors.

Fixed Term Accounts

With fixed-term deposits you put money into your account for an agreed amount of time. Usually the interest rate is fixed for that period and if you take money out during that time you generally pay a penalty.

Interest on savings

You can earn interest on certain accounts. This money is added to your savings.

Joint account

These are accounts you open in the names of more than one person. Before you open a joint account, consider if the permission of all those taking part is required to make any withdrawals and what happens to the account if one of the holders die.

Variable Rate Accounts

Variable rates rise and fall from time to time and may or may not be linked with general interst rate changes in the Eurozone. Variable rate accounts may allow for more flexible withdrawal options than fixed term accounts.

If you would like more specific information call a Bank of Ireland savings advisor now at 1890 365 254to discuss your unique savings needs or request a call back today.