Everyday Banking Glossary

Glossary

ATM

This stands for Automated Teller Machine. See Cash Machine.

Bank

This is a company that lets you store your money with them. They offer financial services, and can give you help and advice on questions about money.

In this guide this word is also used to describe building societies, which are companies that offer similar services to banks.

Bank account or building society account

An account is an arrangement made with a bank or building society, which allows you to store money, take money out and put money in.

Cash machine

This is a machine that lets you take cash out of your account, and check your balance.

Credit

An agreement that allows you to buy an item and pay for it at a later date.

Credit card

A card that gives you credit to buy items. You cannot see money leaving your card account each time you use your card. Instead, you normally pay a bill each month.

Credit score (sometimes referred to as credit rating)

A ‘score’ is given to individuals based on how likely you are to repay the money you borrow, and will affect whether or not you can borrow money in future.

Current account

Your everyday account. The account that you put your money into, and get given a debit card to use for every day purchases.

Debit card

A card that is used to buy items, or to withdraw cash from your bank account.

Direct debit

A regular payment from your account to a company you have agreed to pay. The company you are paying controls the payment.

Insurance

This is something you pay to protect yourself against events which could cause you some loss, for example, loss or damage of your belongings.

Interest

This is additional money, either given to you or owed by you. On your savings, it is additional money given to you as a reward for putting your money in their bank. On a loan or credit card, it is additional money that will be taken from you as a charge for borrowing money.

Loan

This is when someone gives you money that you have to repay over a period of time.

Overdraft / Overdrawn

Being overdrawn is when you spend more money than you have in your account. Most accounts charge money for this, unless you have an agreed overdraft.

PIN (Personal Identification Number)

Each debit or credit card you own will have a different 4-digit number, and you will be asked to enter this number whenever you want to use your card. Do not tell anyone your PIN.

Savings account

This will be an account that you may access less often. This is where you put money to save; money you don’t need to use every day. You will get paid interest on this account.

Scam

This is where someone tries to take your money by pretending to help you or by offering you something.

Standing order

This is a regular payment from your account that you set up and you have control of.

Statement

A list of all payments going into and out of your account in a set time period (for example, you may receive a statement each month).