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 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.
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.
Means Cheque and will appear on your bank statement when you have deposited a cheque or have paid someone by cheque.
Means Correction and will appear on your bank statement when there has been a transaction error.
Means cash and will show on your bank statement when you have paid cash into your account.
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.
A debit card gives you access to your bank account(s) and can be used online, at ATMs and in shops.
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.
Means Debit Entry and will appear on your bank statement showing your transactions it will also appear when your account is in deficit
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.
Means International Bank Account Number and is usually required for international money transfers when making a payment between international bank accounts.
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.
Means International Money Order and is a secure way of sending money abroad
Means Interest and is money added to your account for being in credit or money taken out of your account for being in debit.
Means International Transfer and is when you have sent money from your UK account to a bank account abroad
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.
Means Online Banking Transaction and is a transaction you have carried out online.
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.
Means Point of Sale and is when you make a purchase using your debit card.
Means Reversal and is when a standing order or direct debit has been returned.
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.
Means a Screen Based Transaction and is a transaction processed by a bank branch on your behalf.
Means Society for Worldwide Interbank Financial Telecommunication and is used to identify a bank during an international transfer.
Means telephone and is a transaction carried out using telephone banking
Means Transfer and will show up on your bank statement when you have transferred money from one bank account to another