AER fixed

DEEDIA

I have been informed by Santander that my account is up. They are offering me 5% AER (fixed) for 12 months on balances up to £2,500, Stupid question is what does AER stand for.

Derivative

Annual Equivalent Rate.
For a savings account it essentially means 5% interest per year. Stick £1000 in March 1 2011, take £1050 out March 1 2012.

Note that this is pretax, and you pay Income Tax on interest. 20% tax band would get 4% or £40 on £1000.

DEEDIA

Thanks for that EdgEy, its a ISA so TAX free,

Lokolo_2

DEEDIA wrote: »

Thanks for that EdgEy, its a ISA so TAX free,

Are you sure this is an ISA, Deedia? As you should be able to deposit up to £5100 this tax year and £5340 next tax year, I haven't heard of Banks putting such a limit on, it sounds more like one of Santander's current accounts to me...;)