TOPIC 5 PART 2

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  • Created by: lucyerinb
  • Created on: 02-11-20 16:19
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  • Topic 5 key words part 2
    • Notice account
      • An account for which the holder has to tell the provider in advance if they want to withdraw their money. If they do notgive the provider the required amount of notice, they lose interest on their savings.
    • Personal allowance
      • The amount that an individual can earn before they have to pay income tax.
    • Personal savings allowance
      • The amount of savings interest that can be earned before the saver pays tax. The amount of the allowance varies according to how much other income the saver has earned in the tax year.
    • Rate of return
      • The amount a saver gains in interest on theirsavings. For instance an account paying 0.2% AER offers a lower rate of return than one paying0.4% AER.
    • Retail Prices Index (RPI)
      • One of the ways the government measures inflation. It is calculated by checking the price of a representative sample of goods on a monthly basis but unlike CPI (see above), it also takes into account mortgage interest payments and other costs associated with home ownership.
    • Savings bonds
      • A savings product held for a fixed period,eg two years. The holder can only make a limited number of withdrawals, or none at all, during that period without incurring a penalty.
    • Starting-rate band
      • An amount of savings that an individual can earn tax-free if their total income is less than the personal allowance.
    • Stocks and shares
      • Stocks, shares and equities are all words used to describe an investment that gives the holder part ownership of a company. If the company’s value increases, so does the value of your share; if its value falls, so does the value of your investment. Shares are bought and sold on stock exchanges.
    • Tax year
      • Also known as the financial year, the tax year runs from 6 April to 5 April in the following year. The tax people owe is calculated according to how much they have earned Aprilto April rather than January to December.

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