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Additional voluntary contributions (AVCs) 

These are extra contributions you pay in addition to the normal pension contributions you or your employer make if you are a member of an employer pension plan. AVCs help to boost the value of your pension fund or can be used to contribute to a tax-free lump sum at retirement. You can claim tax relief on AVCs up to certain limits, as long as you earn an income.

Administration fee 

This usually refers to a fee you pay to a financial services firm for a service or product. All regulated firms have to give you details of administration and other fees before you buy a service or product. This can also refer to charges on an investment fund or for setting up a loan or mortgage.

Allocation rate 

This is the percentage of your money that is used to buy units in a pension or other type of investment fund. An allocation rate of 97% means that for every €100 you invest €97 is actually used to buy units. So in effect you pay €3 (or 3%) as a charge to the firm you invest with.

Annual equivalent rate (AER)

The AER shows what your interest on a savings account would be if the interest was compounded and paid out to you each year instead of monthly or over any other period. You may earn less than the AER because your money may not be invested for as long as a year. Sometimes firms use Compound Annual Rate (CAR) instead of AER on savings and investment products.

Annual percentage rate (APR) 

The APR is the annual rate of interest you will be charged on a loan. It takes account of all the costs involved over the term of the loan, such as any set-up charges and the interest rate. You can use the APR to compare costs between different loans, as long as you compare them over the same term, for example 3-year loans.


An annuity is a contract with a life assurance company that will pay you a guaranteed, regular pension income for the rest of your life in return for you paying them a lump sum when you are ready to retire. The amount of pension income you get depends on the size of the lump sum and the annuity rates at the time, plus your age, gender and state of health.

Approved Minimum Retirement Fund (AMRF) 

If you have an Approved Minimum Retirement Fund you cannot withdraw any of your original capital until you reach the age of 75. Until then, you can only access any growth in value the fund may deliver.

Approved Retirement Fund (ARF) 

An Approved Retirement Fund (ARF) is a personal retirement fund where you can keep your pension invested as a lump sum after retirement. You can withdraw from it regularly to give yourself an income, on which you pay income tax.


Also known as a ‘hole-in-the-wall’, it stands for ‘automated teller machine’. If you have an ATM or Laser card you can used the machine to take out cash, order statements, read your account balance and get access to other information about your bank account.

Average clause 

This is a condition included in some home insurance policies that limits what you can claim if you are under-insured. For example, if the contents of your home are worth €40,000 but you insure them for just €20,000 you are under-insured by 50%. If your contents are damaged, destroyed or stolen, the most you will get from your insurance company is 50% of the total damage.

Balloon payment

This is a large final payment, due at the end of some hire purchase agreements including car finance deals. It is used to keep monthly repayments lower and must be paid to finish the agreement and allow you to become the owner of the goods.

Bank Identifier Code (BIC) 

Also known as a SWIFT code, this is the unique identification code given to banks. If you transfer money from one person’s bank account to another, you will need the BIC of the bank that will receive the money transfer. Your code can usually be found on your bank account statements.

Bid-offer spread 

This is an investment charge and refers to the difference between the buying and selling price of a unit in an investment or pension fund on any given day. A typical bid-offer spread would be 5%. This means that if you invest €100 in a pension or investment fund, its value would become €95 (€100 less 5%) if you withdrew the money immediately. The buying and selling price of the units in a fund depend on the value of the assets in the fund.

Boiler rooms 

This is the name given to unauthorised and possibly unscrupulous ‘investment’ companies that use high-pressure sales tactics to sell worthless or high-risk shares, foreign currency or other ‘investments’ to unsuspecting investors.


Some life insurance companies offer guaranteed bonds which provide either a guaranteed return of the investment amount at the end of the term, together with a guaranteed level of the bonus or a guaranteed level of income for the term of the bond, usually 5 years, together with a guaranteed return of the investment amount at the end of the term.

Bridging Loan 

This is a loan given by a lending institution to ‘bridge’ a time difference between buying a new home and selling your existing home.

Buy-out bond

If you leave or move jobs, you can transfer the value of your employer pension to an individual fund, where your money grows tax free, until you retire. This fund usually invests in a mix of assets including: property, stock, cash and bonds. You can also choose to transfer the money to a personal pension plan instead.

Capital gains 

This refers to any profit you make if you sell an asset, such as shares, for a higher price than you originally paid.

Capital Gains Tax (CGT) 

This is a government tax that you must pay if you make a profit (a capital gain) of more than €1,270 in any tax year if you sell an asset such as shares or investment property.
You have to pay 33% of the gains you make above €1,270. (Correct as of May 2014 – check the Revenue site for updates). If you make a loss, you can subtract the amount of the loss from any amount that you owe in CGT.


Collateral is something that a lender accepts as security for a loan. This is usually an asset such as an existing property or investment. If the loan is not repaid, the lender can sell the collateral to meet the outstanding debt.

Collective investment

See pooled investment


This is a payment that a financial services company makes to a financial intermediary, such as a broker or financial advisor, for selling their financial product.

Compound annual return (CAR) 

CAR is a measure of the rate of return on a deposit or investment. You can use it to compare different accounts.
If there is €110 in an account a year after €100 was lodged in it the return, or CAR, is 10%. Your account may have certain terms & conditions that can stop you from getting the full rate, for example you can’t make any withdrawals.


This is the term for the legal process of transferring the ownership of property from seller to buyer.

Cost of credit 

The cost of credit shows you the real cost of borrowing. It is the difference in Euro between the amount you borrow and the total you will repay by the end of the loan period.

Credit history 

This is your track record in repaying loans. Most lenders use a central agency, the Irish Credit Bureau to check your credit history. It keeps files on individual borrowers, and uses the information it gets from lenders to build up each borrower’s credit history.

Credit scoring 

When you apply for a credit card, current account, personal loan, hire purchase (HP) agreement or mortgage, the lender will award you points or marks based on your credit history and on your answers to questions on the loan application form. The total score you get helps the lender predict how big a risk they are taking by giving you a loan and what size loan to give you.

Credit transfer 

This is an order from you to your bank to transfer a sum of money to another account. A credit transfer can be made on paper, by phone, or on the internet if your financial institution has an online banking service.


Crest is the electronic settlement system used to buy and sell shares traded on the London and Irish stock exchanges.
Crest also offers investors the opportunity to hold their shares in electronic form in their own name through personal membership.

Cross-border handling fee

This refers to a fee you may have to pay to your credit card provider when using your credit card abroad in a non-euro area.  When charged, this fee is typically a percentage of the transaction (it can range from 1% to 3%). These fees can also be known as currency conversion fees.

Debt Consolidation

Also called ‘wrapping up your debt’, this means that you take out one single loan, often a mortgage, to pay off individual, smaller, loans.


These are the legal ownership documents of your home or property. Your lender holds them as security for your mortgage.


This is a term used to describe a situation when you fail to pay some or all of the instalments due on a mortgage or other loan.

Defined benefit pension plan 

This is a type of pension plan where the income you get when you retire is related to your final salary and your years of service with your employer. Another type of pension plan is a defined contribution pension fund

Defined contribution pension fund 

With a defined contribution pension plan, you are not promised a percentage of your final salary when you retire. Instead, your pension income depends on the value of your pension fund when you come to retire. Another type of pension plan is a defined benefit pension plan.


This refers to money you hold in a savings or deposit account at a financial institution on which you earn interest.
A mortgage deposit is the difference between the price of a property and the amount you can borrow.

Deposit Interest Retention Tax (DIRT) 

This is a type of tax you pay on any interest you earn from money on deposit in a financial institution. Most financial institutions take it from the interest it pays to your account and pass it over to the Revenue Commissioners. The current rate is 39% (Correct as of December 2017 - check Revenue site for updates). It was announced in Budget 2017 that the DIRT rate would decrease by 2% each year from 2018 to 2020 until it reaches 33%. Non-residents do not have to pay DIRT and anyone over 65 or permanently incapacitated, who is not liable for income tax, is entitled to claim it back.
Non-residents do not have to pay DIRT and anyone over 65 or permanently incapacitated, who is not liable for income tax, is entitled to claim it back.

Deposit Protection Scheme 

This is a scheme designed to compensate depositors, subject to certain limits, when a credit institution (bank or building society) fails. For more information see our Your Rights section.

Direct debit 

This is a payment taken from your account by a third party to whom you have given written permission to do so. You may, for instance, give the ESB permission to withdraw variable amounts of money to pay your electricity bill.


This is a payment that some public companies pay to their shareholders as a way of distributing some of their profits. The payment may be in cash or shares.

Dormant Account 

An account on which there has been no transaction for 15 years or more

Dual life policy 

This is a life insurance policy that provides cover for two people and continues in force after the first person dies. It pays out benefit on each death.

Equivalent annual rate (EAR)

This is used to show the full price of interest on an account. EAR takes into account the basic rate of interest charged or earned, when it is charged or earned, and any additional charges. Additional charges could include quarterly fees, set-up charges, and so on. The EAR calculates the interest as if it is paid once a year, even if it is paid twice or three times per year. The higher the EAR, the more interest you will be charged or earn. It is similar to APR (Annual Percentage Rate) although APR only applies to lending products. EAR applies to deposits (credit) as well as overdrafts (debits).

Endowment policy

An endowment policy is an investment plan. You usually pay premiums into it each month, and the money is invested in shares, bonds, property and cash. The aim is to grow the policy value so that after a set number of years, it will be enough to pay off the original mortgage you borrow.
Endowment policy values can fall as well as rise so there is usually no guarantee the policy will be enough to pay off your mortgage.

Endowment trader

An endowment trader is an individual or company that specialises in buying endowment policies from policyholders.
If you are thinking of surrendering or cashing in an endowment policy, you may wish to compare the option of cashing in with your insurance company or selling or trading to an endowment trader, to get the best value.


Equity is the value of any assets you own after any debts are paid. In the context of your property, your equity refers to the difference between its market value and the mortgage you owe on it.

Equity release 

These are schemes that allow you to release some of the equity, or the value you have built up in your home, without having to move out or sell it on the open market. Certain schemes are available to older homeowners in the form of ‘life-time loans’ or ‘home reversions’.
Equity release is also used to refer to straightforward re-mortgaging.

European Central Bank (ECB) 

The ECB is the central bank for Europe’s single currency, the euro. Its main task is to maintain the purchasing power of the euro and price stability in the euro area. Among its functions is the setting of interest rates for the 13 member countries in the euro zone. The Central Bank and Financial Services Regulatory Autority of Ireland (CBFSAI) is a member of the European System of Central Banks, along with the other member countries.


Eurozone countries are: Austria, Belgium, Finland, France, Germany, Greece, Republic of Ireland, Italy, Luxembourg, Netherlands, Portugal, Slovenia and Spain. In addition EURO transactions in other EU countries are charged at the same rate as in Ireland. Rest of EU countries are Denmark, Sweden, the United Kingdom, Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Romania and Slovakia.


This is the first part of any insurance claim that you have to pay yourself. It is usually a fixed sum. You may not have to pay it on certain types of claim such as windscreen replacement on a motor policy.

Exchange-Traded Fund (ETF) 

This is an investment fund that tracks the shares of a particular stock market index, such as the top 20 shares quoted on the Irish Stock Exchange. The fund itself is also quoted and traded on the stock market.


Exclusions, or restrictions, are events or situations that are not covered by your insurance policy. Standard exclusions are contained in every policy. Specific exclusions are restrictions your insurer adds to your policy only.

Exit penalty 

Also known as an early encashment or exit charge, this is a charge applied by a financial institution when you cash in an investment within a set number of years or before a specific maturity date.

Exit tax 

Not to be confused with an exit penalty, this is a tax that you are liable for if your investment makes a profit. It is 41% of any profit you make and is taken off your investments when you withdraw money. (Correct as of December 2017 - Check Revenue site for updates).div>

Fixed rate

Fixed interest rates are fixed for a set time, so you can miss out on the benefits of lower interest rates. If you want to pay or your full loan, you have to pay penalty fees. You can change it to a variable rate.

Fixed-term deposits

With fixed-term deposits you put money into your account for an agreed amount of time. Usually the interest rate is fixed for that period and if you take money out during that time you generally pay a penalty.

Fund management charge 

This is an annual charge you have to pay to get a fund manager to manage your investment. A typical fund management charge would be 1% per annum. The management charge is often higher if the bid-offer spread is low or zero.


This is a person who agrees to pay off a loan if the borrower fails to pay.


When an insurance company indemnifies any losses, it will pay for the damaged goods or property to be restored to the condition they were in before an event or as close as is possible. Most general insurance policies provide indemnity cover.

Indemnity Bond

An indemnity bond is a type of insurance policy. If you fail to pay back your mortgage and your lender repossesses your property, the indemnity bond insures them against the risk of making a loss on this sale. When you take out a mortgage some lenders may charge you for indemnity bond costs.


Index linking, or indexation, increases the benefit on your life insurance or investment policy automatically every year to make allowances for inflation. Your premium also increases each year to pay for indexation.


The risk that your money will lose value overtime. Your buying power goes down as prices increase. You need to earn more than the inflation rate to get a real return on your money.

International Bank Account Number (IBAN) 

This is an international standard for numbering bank accounts, developed by the European Committee for Banking Standards to make cross border payments more efficient.To process a cross-border money transfer, you will need your IBAN and that of the bank account that is to receive the money. The number can usually be found on your bank account statement.

Investor compensation scheme 

The investor compensation scheme pays compensation, subject to certain limits, to eligible consumers if an authorised investment firm fails. For more information, see our Your Rights section.

Irish Credit Bureau 

This is a credit reference agency that maintains information about individual borrowers' credit histories. You can get a copy of your own details for a small fee by contacting the ICB. Contact

Joint account 

These are accounts you open in the names of more than one person. Before you open a joint account, consider if the permission of all those taking part is required to make any withdrawals and what happens to the account if one of the holders dies.

Joint life policy 

This is a type of life insurance policy that covers two lives, such as you and your spouse, child or business partner. It pays out the benefit only once, either you or your partner dies while the policy is in force.

Land Registry 

This is a central register of the ownership of land and buildings. Not all properties are registered. You need to search the Registry of Deeds to find out if a property is registered.

Letter of Offer 

Also called the ‘offer of advance’, this is a formal statement by your mortgage lender of the amount they are prepared to lend you.


This is the ease or speed with which you can convert your investment to cash. Liquid investments, such as property, cannot be converted to cash at short notice.


This is a charge added to an insurance premium because of some specific risk factor such as the health of an individual looking for a life insurance policy.

Loan-to-Value (LTV) 

This is a percentage representing the amount owing on a mortgage relative to the market value of the property. You have a loan-to-value of 50% if your home is worth €500,000 and you owe €250,000.

Market Value Reduction (MVR) 

This is a reduction in the value of your investment that your life insurance company may apply when you withdraw some or all of your investment except at certain times.

Mortgage Protection 

This is a form of life insurance product, which lenders must make sure you have in place when you take out a mortgage on your family home and if you are under 50 years of age. Your mortgage protection policy pays off the outstanding amount due on your mortgage if you die.

National Treasury Management Agency (NTMA) 

This is a Government agency that manages the national debt and administers the national pension fund. It also administers a fund where unclaimed money from dormant accounts is transferred.

Negative equity 

This term is used to describe a situation where the market value of your house is less than the balance you owe on your mortgage.

No-claims bonus or discount 

This is a percentage reduction you get on your motor or home insurance premium. It is based on the number of years since you made a claim.


This is an official appointed to represent the interests of the public to investigate and address unresolved complaints reported by individual citizens.
You can send your complaint about a financial service to the Pensions Ombudsman or the Financial Services Ombudsman.


When more money is paid out of your current account than you have deposited, your account is said to be in overdraft. Your bank effectively gives you a loan. Your bank must normally approve such loans in advance.
Your bank grants overdraft permission up to a set limit. If you do not have overdraft permission the bank may still allow your account to go into overdraft but may charge an unauthorised overdraft fee.

Pay-related social insurance (PRSI) 

This is a contribution toward the cost of social welfare and pension benefits, payable by employers, employees and the self-employed. It is calculated as a percentage of your earnings.

Percentage point 

A percentage point is the difference between two percentages. A fall of one percentage point would be a fall from ten to nine percent. When the ECB moves interest rates, it is usually by a quarter or half a percentage point.

Permanent total disablement (PTD) 

PTD can mean two different things, depending on your insurance policy. It can mean you are permanently and totally unable to do your own job. Or, it can mean you are not able to do many normal daily activities, so you are permanently unable to work at any job.

Personal identification number (PIN) 

This is a unique code number you use, along with a credit, debit or cash card, to authorise transactions such as cash withdrawals from ATMs. It is personal to you and should be kept secret and separate from your card. You can change your PIN.

Personal retirement savings account (PRSA) 

A personal retirement savings account (PRSA) is a type of personal pension policy available from banks, life assurance companies, and through brokers. It is more flexible than a traditional personal pension plan. Anyone up to the age of 75 can take out a PRSA. You don’t have to be earning an income to do so.


A policy is an insurance contract between you and an insurance company.

Policy benefit 

Also known as the sum assured, this is the amount of money you could receive if you have a successful insurance claim.

Policy fee 

This is a regular fee you pay on some investment and pension policies. A policy fee is usually a fixed amount, for example €3.50 per month.

Pooled investment 

A pooled investment (also called a collective investment) is one where many people put in different amounts of money into a fund, which is then invested in one asset or a mix of assets such as shares, property, bonds or cash. A professional fund manager picks the investments and judges when to buy and sell them. The main benefits of pooled investments are that you can spread your risk, choose from a range of different funds and have lower dealing and administration costs.


This is the amount you pay for an insurance policy. It can be a once-off lump sum or it can be a monthly or yearly payment.

Searches (property) 

Your solicitor will do searches to confirm that the seller of a property can pass ownership to you and that there are no outstanding judgments or debts against the property.


Security is any asset that can be sold to repay the loan if you don’t. It may be a mortgage on a property, an insurance policy or some other asset. Your lender might ask you to put up some form of security before giving you a loan.

Serious illness insurance 

This policy pays a lump sum benefit if you are diagnosed as suffering from one of the serious illnesses specifically covered by your policy.

Stamp Duty (Property) 

This is a tax you pay to the government when you buy a property. A sliding scale of rates applies depending on the size and purchase price of the property and whether you are a first time buyer. For information on property stamp duty go to the Revenue site.

Stamp Duty (Share dealing) 

You must pay a once-off tax of 1% when you buy shares in Ireland. Rates outlined are those that currently apply.

Stamp Duty (Cards) 

You must pay a yearly stamp duty on ATM, credit and debit cards. The Revenue site site has more information on current rates.

Standing order

This is an instruction you give to your bank to make regular payments out of your account to another account. Unlike a direct debit, you instruct your bank directly about how much is to be paid and the amount is fixed and can only be changed by you.

Sum assured 

Also known as the policy benefit, this is the amount of money you could receive if you have a successful insurance claim. With a life insurance or serious illness policy, you choose the sum assured.

Term insurance policy 

This is an insurance policy that pays out a fixed benefit if you die within a certain number of years (the term of the policy).

Terminal illness 

Insurance companies usually define terminal illness as an illness that is likely to result in a person dying within 12 months.

Tracker mortgage

This is a mortgage that is set at a fixed percentage or ‘margin’ above the ECB  rate. For example, it could be set at the ECB rate plus one percentage point. So, if the ECB rate rises by a percentage point, so does your rate. It will also ‘track’ the ECB rate when this rate goes down. Tracker rates continue over the term of your mortgage.

Valuation fee 

This is the fee you pay to a professional valuer, such as an auctioneer or estate agent, to estimate a property’s market value.

Variable rate

Variable rates rise and fall in line with general interest rate changes in the euro zone. Variable rates offer the most flexibility (over fixed rates) and allow you to pay off part or all of your loan without having to pay any fees or penalties.

Whole-of-life policy 

This type of life insurance policy covers you for your whole life. It pays out a benefit when you die – whenever that happens – as long as the policy is still in force. The benefit is not usually fixed and can vary over the life of the policy depending on the performance of the investment fund used by the policy. Also, your premiums are not fixed and may increase from time to time, for example every 10 years or so.


Buying a new property?

If you are looking for a Mortgage be it, you are a 1st Time Buyer, Trading Up or buying for Investment or Business/Commercial, we are Independent Mortgage Advisors, with access to all main mortgage providers. If you have an existing Mortgage and you want advice on how to arrive at a day when you are Mortgage free, a bit sooner, or if you currently find yourself in difficulty with your Mortgage, contact us.

Financing Your Education

When should you start saving for your children’s education? We would say from the moment they are born. How about investing in yourself ? by enhancing your own education?

Managing your Money

We know that sometimes it feels like you are constantly juggling money even if you are earning a good net salary ! Everybody needs a budget plan no matter what their earnings. Yet many people are throwing money away by leaving their hard earned cash sitting in no/low interest accounts in Banks, Credit Unions etc.

Pensions - You will retire someday

It has been well documented that our population is ageing, that our future State Pension is in question and it will most certainly be under pressure. Add issues around Defined Benefit Pension schemes, and the losses some Pension funds incurred. It’s no wonder people are cynical, BUT you will retire someday and you need to save for that day and the sooner the better

The Power of a Plan... take control

That old cliché fail to prepare, prepare to fail, but it's true. Your financial health and financial future is too important not to have a plan.