New Students

Banking Terminology

Glossary of banking terminology

ATM (Automated Teller Machine) ATMs are machines that allow you to with draw cash.
AER ( Annual Equivalent Rate) This shows you have much interest you can earn on your account.

Banker's draft                                                                                                       

This is similar to a cheque which you can use to make a payment. It is made by the bank using your funds.

Bank statements

This is a statement from your bank giving details of the transactions on your bank account. Most people will receive these online, but your bank should be able to print a statement for you on request at the branch.

Contactless payment Some visa cards now allow you to pay by touching your card on the card machine, you can spend up to £30 through contactless.
Current account The most common type of bank account is a ‘current account’ which allows immediate access to your account in contrast to an ‘interest-bearing deposit account’ which normally requires you to provide the bank with some notice before you can withdraw any funds.  When dealing with student banking 'current accounts' are oftern refered to as 'student account'.

Direct Debit

You set up a Direct Debit so bills and charges, such as your phone bill or internet, are taken automatically from your account. The date and amount can vary.

EAR (Equivalent Annual Rate) This show you have much interest you can be charged if you go overdrawn on your account

ISA (Individual Savings Account)

These are available to all UK residents over 18. They can have tax benefits.

Overdraft

An overdraft allows you to spend more money on your account than you have. It can be authorised (agreed to in advance) or unauthorised. Sometimes there is a charge for an overdraft.

PIN (Personal Identification Number)

Your PIN is the four-digit number which is used when paying by card or taking money from a cash machine (ATM).

Payee

A person who receives payment.

Payer

A person who makes a payment.

Standing Order

A regular payment made out of a current account. It is a specific amount and is set up by the account holder. Standing Orders are often used to pay your rent.

Identity theft

Criminals sometimes steal personal details to open or use an account and spend that person's money. It is very important to protect your personal information.