Banking jargon buster
Don't know the difference between direct debits and standing orders? Don't know what AER or overdrafts do? Check out our jargon-busting guide to banking terms.
AER is shorthand for Annual Equivalent Rate. It takes into account the interest you would earn for having your savings in the account for the full year. This helps you compare the savings rates of accounts. The higher the rate, the greater interest you'll accrue.
BACS is a UK banking system run by BACS Payment Schemes Limited, which enables payments directly between two bank accounts. Short for 'Bankers' Automated Clearing Services', the system processes Direct Debits, Tax Credits, wages, pensions and more.
If your debit or credit card has this function, you can pay for goods up to £100 just by touching it against the reader - with no need to enter your PIN. For extra security, you might sometimes be asked to insert your card and enter your PIN.
A Direct Debit is where you're giving a company permission to take money from your account on regular dates. They're most frequently used for things like gas and electric bills or a monthly gym membership, and appear on your bank statement as codes D/D or DDR.
This is the payment card associated with your current account that you use to pay for everyday purchases. Many people find using their debit card preferable to carrying cash around with them.
If you spend more money than you have available in your account, this puts your account into overdraft. Most banks charge a penalty for this and possibly interest on top. You can avoid penalties by arranging an overdraft in advance, which may cost a fee or come with interest.
This is the person, or company, that money is payable to.
6 numbers that identify the branch your account is registered to. You'll usually find it printed on your debit card and bank statement.
Not to be confused with Direct Debits (which are set up by the company you're paying), Standing Orders are set up by you. They let you make regular, fixed payments from your account that are easily adjusted. Standing Orders appear as S/O or STO on your bank statement.
This could be a payment, transfer or withdrawal made on your account. It really just refers to an activity in your account.
Common terms you might find on your bank statement:
If you see CHG on your bank statement means that you've been charged a fee. It could be a pre-arranged fee like an arranged overdraft or a charge for not having enough available funds in your account.
If you see the shortcode 'DR' on your bank account, it means debit balance, but in plain English means you are overdrawn.
You'll see this on your statement if you've carried out a transaction using telephone banking.
This is when money is sent or transferred from one bank account to another. This could be someone transferring money to you or you sending money to yourself from another account.