unit 3 topic 4 Flashcards
individual saving account (ISA)
tax free way to save or invest
deposit or savings account
account where interest is paid on the balance
premium bonds
a government scheme that allows individuals to save up to set amount of bonds - no interest earned but bonds placed into regular draw for cash prizes
bonds and gifts
fixed term securities where individual lends money to companies and governments in return for interest payments
shares
investment in business in return for equity - shareholder becomes part owner of the business
dividend
a distribution by a business to shareholders
cash ISAs
a tax free way to pay money into an account to save or invest
stocks and shares ISAs
tax-efficient investment account - don’t have to pay UK income tax or capital gains tax on money you earn on your investments through your ISA
tax allowance
amount of otherwise taxable money you can earn each year without paying tax
annual equivalent rate (AER)
illustrates what the interest rate would be if it was paid compounded each year
fixed rate term
interest rate stays the same throughout duration of loan
