Annual Percentage Rate (APR)
The total interest rate you pay for a loan or recieive for an investment, including the interest payable over the whole term along with any other related fees or charges.
Asset
Any property with a cash value, such as equipment, real estate, savings and investments.
Cash ISA
An Individual Savings Account (free of all taxes) that invests in cash (including National Savings).
CAT Marked ISA
Abbreviation for Charges, Access and Terms.
A type of Individual Savings Account that adheres to a set of voluntary standards drawn up by the Treasury (Government). These standards give particular guidelines for the creation of ISAs, but are not regulations. An ISA that meets or betters the Standards is awarded a CAT mark.
Deposit
To place money into a bank account.
Income
The total amount of money a person receives from all sources.
Individual Savings Account (ISA)
A tax-efficient financial produce in which a variety of investments can be held. The two main varieties of ISa are Mini and Maxi.
ISA Regulations
The Individual Savings Account Regulations 1998 (statutory instrument 1998 No. 1870) and any other regulations and/or rules relating to ISAs.
Managed
A type of fund that is actively managed by a professional fund manager, who uses their expertise in stocks and shares to attempt to give better returns than the stock market.
Maxi ISA
A type of ISA that can hold all three of the different type of investments that are allowed- Cash, Stocks and Shares, and Life Assurance. A Maxi ISA uses the full ISA allowance for all components to one individual ISA provider. Only one Maxi ISA may be taken out by an individual in any one tax year.
It should be noted that the Life Assurance component has not been available since the 2005/6 tax year.
Micropal Star Rating
A rating developed by Standard & Poor's Micropal, a company who monitor the performance of different types of investment funds, evaluating their performance and the riskiness of the fund compared to other funds in the same sector. The more stars awarded to a fund (up to a maximum of 5), the better Micropal believe the fund is. However, investors should remember that a rating is a snapshot only, and that past performance is no guide to the future.
Mini ISA
A type of ISA that can only hold one type of investment: Cash, Stocks and Shares OR Life Assurance. However, it should be noted that the Life Assurance component has not been available since the 2005/6 tax year.
An investor can have a Mini ISA in 2 separate components with up to 2 providers; i.e. they can hold up to 2 Mini ISAs up to their full ISA allowance; for example, a cash ISA with company A and a stocks and shares ISA with Company B.
Personal Equity Plan (PEP)
An investment for individuals that was free of Income and Capital Gains Tax, in which money was invested directly in Unit Trusts/OEICs or Shares or Investment Trusts.
PEPs are no longer available and the last accounts were taken out by investors on the 5 April 1999. However, all existing PEPs are allowed to continue indefinitely.
Sector ISA
A term that refers to how funds are grouped. A fund may be placed in a grouping by the type of fund it is or the country it invests in. For example, funds that invest in Europe will be found in the European sector.
Self-Select ISA
An ISA that invests in particular stocks and shares that have been selected by the investor. This type of ISA is typically used by investors who wish to invest directly in shares. Some investors will also invest in Unit Trusts, however this is less common, as it is normally better value for Unit Trust Investors to invest directly with the Unit trust Company.
Stamp Duty
A tax levied by the government when assets (property or shares) are purchased.
Stocks and Shares ISA
An Individual Savings Account that invests in stocks and shares either directly or through vehicles that invest in Government investments and/or the Stockmarket. Most people invest in stocks and shares through Investment Trusts, Unit Trusts or OEICs (Open-Ended Investment Companies).
TESSAs
Tax-Exempt Special Savings Account.
This was a special building society or bank account that had a 5 year life, which allowed interest to be earned free of tax, provided capital was not withdrawn during that period.
TESSAs were replaced from 1999 by Individual Savings Accounts (ISAs). The final TESSAs matured on 5 April 2004, but the original capital could be 'rolled over' into a new tax-free investment through use of a TESSA only ISA (TOISA), without affecting the ISA allowance.
Tracker Fund
A Fund that invests in the shares of one or more Stockmarket indices. The aim of such a fund is to follow (track) the Index or indices (Stockmarket/s) as closely as possible. Such Funds have no one managing the fund and the process is largely automated. The shares are often bought and managed through a computer program.
