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Home Student Guide UK banking terms explained

UK banking terms explained

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    UK Banking Terms Explained

    This article was published by the Great British Mag contents team on 21 Dec 2020

    Setting up a UK bank account and understanding UK banking terminology can be a bit tricky, so here are the most common abbreviations and terms you might come across.

    UK Banking Terms

    UK Banking Terms Explained

    ATM

    ATM are everywhere and allow you to access money, up to your daily limit, 24/7.

    Automated credit transfer

    This is a direct payment made to your account from another account. If the payment is from a UK bank account, the money should appear in your account on the same day. However, if the payment is from an overseas account it can take longer.

    BAC or BACS

    Stands for Bankers’ Automated Clearing Services and is used when someone pays money into your bank account within the UK, such as an employer paying in your salary.

     

    CHG

    Means Charge and will appear on your bank statement when you have been charged a fee by the bank, for using banking services such as direct debits.

    CHAPS or CHP

    Means Clearing House Automated Payment System and is used when you want to transfer money from one account into another account, at another bank.

    CHQ

    Means Cheque and will appear on your bank statement when you have deposited a cheque or have paid someone by cheque.

    COR

    Means Correction and will appear on your bank statement when there has been a transaction error.

    CSH

    Means cash and will show on your bank statement when you have paid cash into your account.

    CR

      Means Credit and will appear on your bank statement when money has been put into your account and against your total balance to show how much credit you have in your account.

    Debit card

    A debit card gives you access to your bank account(s) and can be used online, at ATMs and in shops.

    D/D  

    Means Direct debit  which is an instruction to your bank to pay organisation or company a regular bill, such as a mobile phone bill. Setting up a D/D means any amount can be collected from your account.

    DR

    Means Debit Entry and will appear on your bank statement showing your transactions it will also appear when your account is in deficit

    ERTF

    Means Exchange Rate Transaction Fee  and will normally appear when you have used your debit card abroad at and ATM or Point of Sale machine.

    FPI or FP

    Means ‘Faster Payment and may be an option with your account that allows you to make transfers, within the UK, that appear in the recipients account within hours.

    IBAN

    Means International Bank Account Number and is usually required for international money transfers when making a payment between international bank accounts.

    ID

    This is short for ‘identity’, referring to something like a passport. You will need to take some form of identity along with you when you open a bank account.

    IMO

    Means International Money Order and is a secure way of sending money abroad

    INT

    Means Interest and is money added to your account for being in credit or money taken out of your account for being in debit.

    ITL

    Means International Transfer and is when you have sent money from your UK account to a bank account abroad

    Overdraft

    is when your bank allows you to spend more money than you have in your account, which incurs interest until you pay back the money you have used.

    OTR

    Means Online Banking Transaction and is a transaction you have carried out online.

    PIN

    Is the four-digit number that you use when you are using your debit card in a shop or getting money out of an ATM.

    POS

    Means Point of Sale and is when you make a purchase using your debit card.

    REV

    Means Reversal and is when a standing order or direct debit has been returned.

    SAL

    Means Salary and will show on your bank statement alongside the amount that has been paid in by your employer.

    Standing order, S/O or STO

    A standing order is when you instruct your bank to pay a fixed amount of money at regular intervals into another account and is useful to pay your rent automatically every month.

    SBT

    Means a Screen Based Transaction and is a  transaction processed by a bank branch on your behalf.

    SWIFT

    Means Society for Worldwide Interbank Financial Telecommunication and is used to identify a bank during an international transfer.

    TEL

    Means telephone and is a transaction carried out using telephone banking

    TFR

    Means Transfer and will show up on your bank statement when you have transferred money from one bank account to another

    You may also want to read:

    Best online pre-paid current accounts for international students

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      Wahida Ashiq

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