Personal finance is full of jargon — from ISAs and SIPPs to LTV ratios and nil-rate bands, it can feel like a different language. Whether you’re buying your first home, starting a pension, or simply trying to make sense of your payslip, understanding these terms is the first step towards taking control of your money. This A-Z glossary explains over 100 UK personal finance terms in plain English, so you can make informed decisions with confidence.
A
AER (Annual Equivalent Rate)
The AER shows you the true yearly interest rate on a savings account, taking into account how often interest is compounded. It makes it easy to compare savings products on a like-for-like basis, even if they pay interest monthly, quarterly, or annually. See our compound interest calculator to see how compounding affects your savings.
AIM (Alternative Investment Market)
AIM is a sub-market of the London Stock Exchange designed for smaller, growing companies. Investing in AIM-listed shares carries higher risk than main-market stocks but can offer tax advantages, including potential relief from inheritance tax after two years of ownership. Learn more in our investing for beginners guide.
Amortisation
Amortisation is the process of gradually paying off a debt through regular instalments that cover both interest and a portion of the original loan amount. With a repayment mortgage, for example, each monthly payment reduces the outstanding balance until the debt is fully cleared by the end of the term. Use our mortgage repayment calculator to see how amortisation works in practice.
Annuity
An annuity is a financial product that converts your pension pot into a guaranteed regular income for the rest of your life, or for a fixed period. You buy an annuity from an insurance company when you retire, and the amount you receive depends on the size of your pot, your age, and current annuity rates. See our state pension guide for more on retirement income options.
APR (Annual Percentage Rate)
The APR is the total cost of borrowing expressed as a yearly percentage, including interest and any mandatory fees. Lenders are legally required to show the APR so you can compare credit cards, loans, and mortgages on an equal footing. Use our personal loan calculator to see how APR affects your repayments.
Arrangement Fee
A one-off charge levied by a mortgage lender for setting up your mortgage deal. Arrangement fees can range from a few hundred to over £1,000 and can usually be added to the loan, though this means you’ll pay interest on the fee as well. See our mortgage calculator to factor in costs when planning your mortgage.
B
Balance Transfer
Moving an existing credit card debt to a new card, usually to take advantage of a lower or 0% introductory interest rate. Balance transfers can save you money on interest and help you pay off debt faster, but watch out for transfer fees and make sure you clear the balance before the promotional period ends. Read our debt repayment strategies for more tips.
Bank of England
The UK’s central bank, responsible for setting the base rate, issuing banknotes, and maintaining financial stability. Its Monetary Policy Committee meets eight times a year to decide on interest rates, which directly affect mortgage rates, savings rates, and the wider economy.
Base Rate
The base rate (or Bank Rate) is the interest rate set by the Bank of England. It influences what banks and building societies charge on loans and pay on savings. When the base rate rises, mortgage rates and savings rates tend to follow; when it falls, borrowing becomes cheaper but savings earn less.
Bridging Loan
A short-term, high-interest loan designed to bridge the gap between buying a new property and selling your existing one. Bridging loans are typically repaid within 12 months and can be useful when property chains break down, but the costs are significantly higher than a standard mortgage.
Buildings Insurance
Insurance that covers the cost of repairing or rebuilding your home if it’s damaged by events such as fire, flooding, or subsidence. Most mortgage lenders require you to have buildings insurance as a condition of your loan. See our home insurance guide for details.
Buy-to-Let
A property purchased specifically to rent out to tenants rather than to live in. Buy-to-let mortgages have different criteria to residential mortgages, typically requiring a larger deposit (usually at least 25%) and charging higher interest rates. Use our buy-to-let mortgage calculator to estimate your costs.
C
Capital Gains Tax (CGT)
A tax on the profit you make when you sell or dispose of an asset that has increased in value, such as a second property, shares, or valuable possessions. You don’t pay CGT on your main home, ISA investments, or assets below the annual exempt amount. Read our capital gains tax guide for current rates and allowances.
Cash ISA
A tax-free savings account where the interest you earn is completely free from income tax. Every UK adult has an annual ISA allowance (currently £20,000), which can be split across different types of ISA. See our types of ISA explained guide and try our ISA calculator to see how your savings could grow.
Child Benefit
A regular government payment to anyone responsible for raising a child under 16 (or under 20 if they stay in approved education or training). The High Income Child Benefit Charge means families where one parent earns over a certain threshold may have to repay some or all of the benefit through self-assessment.
Compound Interest
Interest calculated on both the initial amount and the accumulated interest from previous periods — essentially, earning interest on your interest. Over time, compound interest can dramatically accelerate your savings growth. Try our compound interest calculator to see the effect for yourself.
Conveyancing
The legal process of transferring property ownership from one person to another. A conveyancer or solicitor handles searches, contracts, and the exchange of funds when you buy or sell a home. See our first-time buyer guide for a step-by-step overview.
Council Tax
A local tax set by your council to fund services such as rubbish collection, schools, and emergency services. The amount you pay depends on your property’s valuation band and where you live. Some people are eligible for discounts or exemptions. Read our council tax guide for full details.
Credit Score
A numerical rating that reflects your creditworthiness, based on your borrowing and repayment history. In the UK, the three main credit reference agencies — Experian, Equifax, and TransUnion — each use their own scoring system. A higher score improves your chances of being accepted for credit at better rates. See our credit score guide for tips on improving yours.
Critical Illness Cover
An insurance policy that pays out a tax-free lump sum if you’re diagnosed with a specified serious illness, such as cancer, heart attack, or stroke. It’s separate from life insurance and can help cover mortgage payments, living costs, or medical expenses during recovery. Read our life insurance guide to compare protection options.
D
Defined Benefit Pension
A type of workplace pension that promises a specific retirement income based on your salary and years of service, rather than the amount you’ve contributed. Also known as a final salary or career average pension, these schemes are now rare in the private sector but remain common in the public sector. See our workplace pension guide for more.
Defined Contribution Pension
A workplace or personal pension where you and your employer pay into a pot that is invested on your behalf. The retirement income you receive depends on how much was contributed and how well the investments performed — there is no guaranteed amount. Read our workplace pension guide for more on how contributions work.
Deposit
A lump sum paid upfront when buying a property, typically expressed as a percentage of the purchase price. The larger your deposit, the lower your loan-to-value ratio and the better mortgage rates you’re likely to be offered. Try our mortgage deposit calculator to plan your savings target.
Direct Debit
An arrangement that authorises a company to collect varying amounts from your bank account on agreed dates. Direct debits are commonly used to pay utility bills, subscriptions, and insurance premiums, and are protected by the Direct Debit Guarantee.
Dividend
A payment made by a company to its shareholders, usually from its profits. In the UK, dividends have their own tax rates and a separate tax-free allowance. Holding shares within an ISA means any dividends you receive are completely tax-free. See our dividend tax guide for current rates.
E
Emergency Fund
A pot of easily accessible savings set aside to cover unexpected expenses, such as a car repair, job loss, or boiler breakdown. Most financial experts recommend keeping three to six months’ worth of essential spending in an emergency fund. Read our emergency fund guide for help building yours.
Endowment
An investment-linked savings plan that was historically used alongside an interest-only mortgage to build up enough money to repay the loan at the end of the term. Many endowment policies sold in the 1980s and 1990s underperformed, leaving borrowers with a shortfall.
EPC (Energy Performance Certificate)
A document that rates a property’s energy efficiency on a scale from A (most efficient) to G (least efficient). An EPC is legally required when you sell or rent out a property in England and Wales, and rental properties must meet a minimum rating of E.
Equity
The portion of your property’s value that you own outright — calculated as the property’s current market value minus any outstanding mortgage. As you pay down your mortgage or your property increases in value, your equity grows. Use our loan-to-value calculator to work out your current equity.
Equity Release
A way for homeowners aged 55 or over to access the value tied up in their property without having to sell it. The two main types are lifetime mortgages and home reversion plans. Equity release reduces the value of your estate and should be considered carefully with professional advice.
Exchange Rate
The rate at which one currency can be exchanged for another. Exchange rates fluctuate constantly based on economic factors and affect the cost of overseas holidays, international money transfers, and imported goods.
F
Final Salary Pension
A type of defined benefit pension where your retirement income is calculated based on your final (or near-final) salary and years of service. These pensions offer valuable guaranteed income but are now mainly found in the public sector. See our workplace pension guide for a comparison of pension types.
Financial Conduct Authority (FCA)
The UK’s financial regulator, responsible for ensuring that financial markets work well and that consumers are protected. The FCA regulates banks, building societies, financial advisers, and insurance companies, among others.
Fixed Rate Mortgage
A mortgage where the interest rate is locked in for a set period, typically two to five years. Your monthly payments stay the same during the fixed period, giving you certainty over your budget regardless of what happens to the Bank of England base rate. See our guide to getting the best mortgage rate for tips.
Freehold
A form of property ownership where you own the building and the land it sits on outright, with no time limit. Most houses in the UK are freehold, while flats are typically sold on a leasehold basis. See our property market guide for more on buying in the UK.
G
Gazumping
When a seller accepts your offer on a property but then accepts a higher offer from another buyer before contracts are exchanged. Gazumping is legal in England and Wales (though not in Scotland) and is one of the risks of the property-buying process.
Gift Aid
A government scheme that allows charities to claim an extra 25p for every £1 you donate, at no extra cost to you, provided you’re a UK taxpayer. Higher and additional rate taxpayers can also claim back the difference between their tax rate and the basic rate through self-assessment.
Gross Income
Your total income before any deductions such as income tax, National Insurance, or pension contributions. This is the headline salary figure quoted in job adverts and is the starting point for calculating what you actually take home. Use our take-home pay calculator to see what your gross income means in practice.
Ground Rent
A charge paid by a leaseholder to the freeholder of a property, typically on an annual basis. The Leasehold Reform (Ground Rent) Act 2022 set ground rents on most new long leases in England and Wales to zero (a peppercorn), but historical leases may still include escalating ground rents.
Guarantor
A person — usually a parent or close family member — who agrees to cover your loan or rent payments if you’re unable to make them. Having a guarantor can help first-time buyers or those with a limited credit history secure a mortgage or tenancy.
H
Help to Buy
A former government scheme designed to help first-time buyers in England get on the property ladder with just a 5% deposit. The equity loan version closed to new applications in 2023, but the Help to Buy ISA (also closed to new accounts) continues to pay bonuses on existing accounts. See our first-time buyer guide for current options.
HMRC (His Majesty’s Revenue & Customs)
The UK government department responsible for collecting taxes, paying certain state benefits, and administering National Insurance. HMRC handles everything from income tax and VAT to self-assessment tax returns and tax credits.
Home Insurance
Insurance that protects your property (buildings insurance) and your belongings (contents insurance) against damage, theft, and other risks. Most mortgage lenders require buildings insurance as a minimum. See our home insurance guide for what to look for.
I
Income Protection
An insurance policy that pays out a regular income — typically between 50% and 70% of your salary — if you’re unable to work due to illness or injury. Unlike critical illness cover, income protection pays out for as long as you’re unable to work (until retirement, if necessary). Read our income protection guide for more.
Income Tax
The tax you pay on your earnings above your Personal Allowance. In the UK, income tax is charged at different rates depending on which band your income falls into — basic rate (20%), higher rate (40%), and additional rate (45%). See our income tax guide for current thresholds and use our take-home pay calculator to see how much tax you’ll pay.
Index Fund
A type of investment fund that aims to match the performance of a specific market index, such as the FTSE 100 or S&P 500, rather than trying to beat it. Index funds typically have much lower fees than actively managed funds, making them a popular choice for long-term investors. See our investing for beginners guide to learn more.
Individual Savings Account (ISA)
A tax-efficient wrapper that lets you save or invest up to £20,000 per year without paying tax on the interest, dividends, or capital gains. There are several types, including Cash ISAs, Stocks & Shares ISAs, Lifetime ISAs, and Innovative Finance ISAs. See our types of ISA explained guide for a full comparison.
Inflation
The rate at which the general level of prices for goods and services rises over time, reducing the purchasing power of your money. In the UK, inflation is measured by the Consumer Prices Index (CPI). Try our inflation calculator to see how inflation affects the real value of your savings.
Inheritance Tax (IHT)
A tax on the estate (property, money, and possessions) of someone who has died. In the UK, IHT is charged at 40% on the value of the estate above the nil-rate band (currently £325,000), though various reliefs and exemptions can reduce or eliminate the bill. Read our inheritance tax guide for a detailed breakdown.
Interest-Only Mortgage
A mortgage where your monthly payments cover only the interest on the loan, not the capital. The full loan amount remains outstanding and must be repaid at the end of the mortgage term, usually from savings, investments, or the sale of the property. Try our interest-only mortgage calculator to compare costs.
IR35
Tax legislation designed to identify contractors and freelancers who work in a similar way to employees (sometimes called “disguised employment”) and ensure they pay broadly the same tax and National Insurance. Since April 2021, medium and large private-sector clients are responsible for determining a contractor’s IR35 status.
J
Joint Tenants
A form of property ownership where two or more people each own the whole property equally. If one joint tenant dies, their share automatically passes to the surviving owner(s), regardless of what their will says. Compare this with tenants in common, below.
Junior ISA
A tax-free savings or investment account for children under 18. Parents or guardians can open a Junior ISA, and anyone can contribute up to the annual allowance. The child can manage the account from age 16 but cannot withdraw the money until they turn 18. See our types of ISA explained for more.
L
Leasehold
A form of property ownership where you own the property for a fixed number of years but not the land it sits on. Leaseholders typically pay ground rent and service charges to the freeholder. Most flats in England and Wales are sold on a leasehold basis, and lease lengths can be extended. See our property market guide for more.
Life Insurance
A policy that pays out a lump sum to your chosen beneficiaries if you die during the policy term. It’s often taken out alongside a mortgage to ensure your family can pay off the home loan if the worst happens. Read our life insurance guide for the different types available.
Lifetime ISA (LISA)
A savings or investment account available to 18-39 year olds that offers a 25% government bonus on contributions of up to £4,000 per year. The money can be used to buy your first home (up to £450,000) or withdrawn after age 60. Early withdrawals for other purposes incur a 25% penalty. See our types of ISA explained guide.
Loan-to-Value (LTV)
The ratio between your mortgage and the value of the property, expressed as a percentage. For example, if you have a £180,000 mortgage on a property worth £200,000, your LTV is 90%. Lower LTVs generally give you access to better mortgage rates. Use our loan-to-value calculator to check yours.
M
Mortgage
A long-term loan secured against a property, used to buy a home. You make monthly repayments over a set term (typically 25-35 years) and the lender can repossess the property if you fail to keep up with payments. Explore our full range of mortgage calculators to plan your borrowing.
Mortgage Broker
A professional who searches the mortgage market on your behalf to find the most suitable deal for your circumstances. Brokers can access products from a wide range of lenders, including some deals not available directly. They may charge a fee or earn commission from the lender. See our guide to getting the best mortgage rate for more.
N
National Insurance (NI)
A tax on your earnings and self-employed profits that builds your entitlement to certain state benefits, including the State Pension. Employees, employers, and the self-employed all pay different classes of NI at different rates. Read our National Insurance guide for a full breakdown.
Negative Equity
A situation where your property is worth less than the outstanding balance on your mortgage. Negative equity can make it difficult to remortgage or sell your home, though it only becomes a real financial problem if you need to move.
Net Income
Your take-home pay after all deductions — including income tax, National Insurance, pension contributions, and student loan repayments — have been subtracted from your gross income. Use our take-home pay calculator to calculate your net income instantly.
Nil-Rate Band
The threshold below which no inheritance tax is charged on an estate. The standard nil-rate band in the UK is currently £325,000, and there is an additional residence nil-rate band of £175,000 if you leave your home to a direct descendant. Read our inheritance tax guide for more on how these work together.
O
Offset Mortgage
A mortgage linked to your savings account, where your savings balance is offset against the mortgage debt to reduce the amount of interest you pay. For example, if you have a £200,000 mortgage and £30,000 in savings, you only pay interest on £170,000. You don’t earn interest on your savings, but the tax-free mortgage saving can be worth more.
Overpayment
Paying more than your required monthly mortgage payment, or making a lump-sum payment, to reduce your outstanding mortgage balance faster. Most lenders allow overpayments of up to 10% of the balance per year without penalty. Use our mortgage overpayment calculator to see how much you could save.
P
PAYE (Pay As You Earn)
The system used by employers to deduct income tax and National Insurance from your wages before you receive them. Most UK employees are taxed through PAYE, which means you don’t need to file a self-assessment tax return unless you have other income sources.
Pension
A long-term savings plan designed to provide you with income in retirement. The three main types in the UK are the State Pension, workplace pensions, and personal pensions (including SIPPs). Contributions to pensions receive tax relief, making them one of the most tax-efficient ways to save. See our pension vs ISA comparison.
Pension Drawdown
A way of accessing your pension pot from age 55 (rising to 57 from 2028) by keeping it invested and withdrawing money as and when you need it, rather than buying an annuity. Drawdown offers flexibility but carries the risk that your pot could run out if you withdraw too much.
Personal Allowance
The amount of income you can earn each year before you start paying income tax. The Personal Allowance for most people in the UK is currently £12,570, though it is gradually reduced for those earning over £100,000 and is zero for incomes above £125,140. See our income tax guide for more.
Premium Bonds
A savings product issued by National Savings & Investments (NS&I) where, instead of earning interest, your bond holdings are entered into a monthly prize draw with tax-free prizes ranging from £25 to £1 million. Your capital is 100% backed by the UK government and can be withdrawn at any time.
Principal
The original amount of money borrowed on a loan or mortgage, excluding any interest or fees. As you make repayments on a capital repayment mortgage, the principal decreases over time. Use our mortgage repayment calculator to see how your principal reduces.
Probate
The legal process of administering someone’s estate after they die, including valuing their assets, paying any debts and taxes, and distributing the remainder according to their will (or the rules of intestacy if there’s no will). Read our wills and estate planning guide for details on preparing for this process.
R
REIT (Real Estate Investment Trust)
A company that owns and manages income-generating property, such as offices, shopping centres, or residential buildings, and is listed on a stock exchange. REITs must distribute at least 90% of their rental income to shareholders as dividends, making them a way to invest in property without buying it directly. See our property investment guide.
Remortgage
The process of switching your existing mortgage to a new deal, either with your current lender or a different one. People remortgage to get a lower interest rate, release equity, or move from a variable rate to a fixed rate. Read our remortgaging guide for step-by-step advice.
Rental Yield
The annual rental income from a property expressed as a percentage of the property’s value. Gross rental yield is simply the annual rent divided by the property price, while net yield factors in costs such as maintenance, insurance, and void periods. See our property investment guide for more.
Repayment Mortgage
A mortgage where each monthly payment covers both the interest and a portion of the capital, so the loan is guaranteed to be fully repaid by the end of the term. This is the most common type of mortgage in the UK. Use our mortgage repayment calculator to plan your payments.
Residence Nil-Rate Band
An additional inheritance tax threshold available if you leave your home to a direct descendant (child or grandchild). Currently set at £175,000, it sits on top of the standard nil-rate band. Read our inheritance tax guide for full details on eligibility and tapering.
S
S&P 500
A stock market index that tracks the performance of 500 of the largest companies listed on US stock exchanges. Widely regarded as the best single gauge of the US equity market, the S&P 500 is a popular benchmark for index fund investors worldwide. See our investing for beginners guide.
Salary Sacrifice
An arrangement where you agree to give up part of your pre-tax salary in exchange for a non-cash benefit, such as increased pension contributions, cycle-to-work schemes, or childcare vouchers. Because the sacrifice happens before tax and NI are calculated, both you and your employer can save money. Read our salary sacrifice guide for full details.
SDLT (Stamp Duty Land Tax)
See Stamp Duty below.
Self-Assessment
The system used by HMRC to collect income tax from people whose tax isn’t fully deducted at source through PAYE. You must file a self-assessment tax return if you’re self-employed, a company director, have significant investment income, or earn above certain thresholds. The deadline is 31 January following the end of the tax year.
Shared Ownership
A government-backed scheme that allows you to buy a share (usually between 25% and 75%) of a property and pay rent on the remaining share. Over time, you can buy additional shares through a process called staircasing. It’s designed to help people who can’t afford to buy outright. See our first-time buyer guide for current options.
SIPP (Self-Invested Personal Pension)
A type of personal pension that gives you control over how your retirement savings are invested. With a SIPP, you can choose from a wide range of investments including shares, funds, bonds, and commercial property. Contributions benefit from tax relief, just like other pensions. See our pension vs ISA comparison.
Stamp Duty (Stamp Duty Land Tax)
A tax paid when you buy a property or land in England and Northern Ireland above a certain price threshold. The amount you pay depends on the purchase price and whether you’re a first-time buyer, a home mover, or buying an additional property. Scotland has LBTT and Wales has LTT instead. Use our stamp duty calculator to find out what you’d owe.
Standard Variable Rate (SVR)
Your mortgage lender’s default interest rate, which you’ll move onto if you don’t remortgage when your fixed or tracker deal ends. SVRs are typically higher than other mortgage rates and can change at any time at the lender’s discretion. See our remortgaging guide for advice on avoiding the SVR.
Standing Order
A regular, fixed payment that you instruct your bank to send to another account on a set date. Unlike a direct debit, only you can change the amount or cancel a standing order. They’re commonly used for rent payments, regular savings transfers, or paying friends and family.
State Pension
A regular payment from the government that you receive when you reach State Pension age, provided you have enough qualifying years of National Insurance contributions. The full new State Pension is currently £221.20 per week (2024/25). Read our state pension guide for details on eligibility and how to top up.
Stocks & Shares ISA
An ISA that lets you invest in shares, funds, bonds, and other investments completely free from capital gains tax and income tax on dividends. Over the long term, a Stocks & Shares ISA has the potential to grow your money faster than a Cash ISA, though the value of investments can go down as well as up. See our types of ISA explained guide.
Student Loan
A loan from the UK government to help cover tuition fees and living costs at university. Repayments are taken automatically from your salary once you earn above a threshold, and any remaining balance is written off after 25-40 years depending on your plan type. Read our student loan repayment guide for full repayment details.
T
Tax Code
A code used by HMRC to tell your employer how much income tax to deduct from your pay. The most common tax code is 1257L, which reflects the standard Personal Allowance of £12,570. If your code looks wrong, contact HMRC as you could be paying too much or too little tax.
Tax Year
The UK tax year runs from 6 April to 5 April the following year. Allowances such as the ISA allowance, Personal Allowance, and capital gains annual exempt amount all reset at the start of each tax year, so it’s worth using them before they expire. See our tax-efficient investing guide for strategies.
Tenants in Common
A form of property ownership where two or more people each own a defined share of the property, which doesn’t have to be equal. Unlike joint tenants, each owner can leave their share to anyone they choose in their will. This is a common arrangement for unmarried couples and those who want to protect their investment for their beneficiaries.
Tracker Mortgage
A mortgage with an interest rate that moves in line with an external rate, usually the Bank of England base rate. For example, a tracker might be set at the base rate plus 1%. Your payments go up when the base rate rises and down when it falls. See our guide to getting the best mortgage rate.
Trust
A legal arrangement where one person (the trustee) holds and manages assets on behalf of another (the beneficiary). Trusts are commonly used in estate planning to control how and when assets are passed on, and can help reduce inheritance tax in certain circumstances. See our wills and estate planning guide for more.
U
Underwriting
The process a lender or insurer uses to assess risk before agreeing to provide you with a mortgage, loan, or insurance policy. Mortgage underwriting involves checking your income, expenditure, credit history, and the property’s value to decide whether to approve your application.
Universal Credit
A means-tested benefit that replaces six legacy benefits (including Jobseeker’s Allowance, Housing Benefit, and Working Tax Credits) into a single monthly payment. It’s available to people on a low income or who are out of work, and the amount you receive depends on your circumstances.
V
Variable Rate
An interest rate that can go up or down over time, as opposed to a fixed rate. Variable rate mortgages include tracker mortgages (which follow the base rate) and standard variable rates (set by the lender). Your monthly payments can change, making budgeting less predictable.
VAT (Value Added Tax)
A consumption tax added to most goods and services in the UK, currently charged at a standard rate of 20%. Some items are subject to reduced rates (5%) or are zero-rated or exempt. VAT-registered businesses must charge VAT on their sales and can reclaim VAT on their business purchases.
VCT (Venture Capital Trust)
A listed company that invests in small, early-stage UK businesses. VCTs offer generous tax incentives — including 30% income tax relief on investments up to £200,000 per year and tax-free dividends — but they are high-risk and illiquid. See our tax-efficient investing guide for more on VCTs and other tax-efficient options.
W
Workplace Pension
A pension scheme arranged by your employer. Under auto-enrolment rules, most UK employers must enrol eligible workers into a workplace pension and make minimum contributions. Combined with your own contributions and tax relief, workplace pensions are one of the most effective ways to save for retirement. Read our workplace pension guide.
Y
Yield
The income earned from an investment, expressed as a percentage of its value. For savings accounts, it’s the interest rate; for shares, it’s the dividend yield; and for property, it’s the rental yield. A higher yield means more income relative to the investment’s price, but higher yields often come with higher risk. See our investing for beginners guide to learn more.