Asset: type of investment, normally divided into four classes - shares, property, fixed-interest securities and cash.

Annuity: where an insurance company promises to pay an income for life in exchange for a lump sum.

Bond: can refer to a corporate bond issued by a company or a gilt issued by the Government to borrow money from investors via the stock market, also known as fixed- interest securities. Some investment products are also described as bonds.

Bonus rate: the rate of return on a with-profits policy set by the insurance company actuary.

Buy-to-let: the purchase of a residential property to let for investment purposes.

Capital growth: increase in the capital value of an investment as reflected in a higher selling price.

Deposit: another name for cash.

Derivatives: a term for futures, options and warrants

Distribution Bond: investment bonds issued by insurance companies which invest in a mixture of shares

and fixed interest securities.

Dividends: the income from shares paid out of company profits.

Equities: another name for shares.

Fixed interest: a guaranteed rate of interest paid for the term of the investment.

Fund: a general term to described collective investments, such as unit and investment trusts and Oeics, which pool the investments of smaller investors to invest in portfolios of shares, fixed- interest securities or other assets.

Gilts: bonds issued by the Government.

Guaranteed income bond: a lump sum investment that provides a fixed level of income normally over a period of one to five years and a return of capital at the end of the term.

Individual savings account: Isas are tax-free plans for investing in stocks and shares, cash deposits or life insurance investment funds.

Income shares: a class of share in a split-capital investment trust that entitles the holder to all the income generated by the trust's investments, but with no guarantee that the entire original stake will be returned.

Investment Trust: an investment fund set up as a company in which investors buy shares. The price of the shares is determined by supply and demand, so they may trade at a discount or premium to the actual value of the trust's assets.

Open-ended investment companies: Oeics are funds that are similar to unit trusts with only one price at which they are bought and sold.

Offshore investments: products sold from offshore centres such as the Channel Isles and Luxembourg.

Ordinary share: a share entitling the holder to dividends and capital growth.

Permanent Interest Bearing Shares: Pibs are shares that are issued by building societies which pay a fixed rate of interest but have no set redemption date.

Personal equity plan: a Pep was the tax-efficient savings plan that was available prior to Isas. Existing Peps have not been affected by the introduction of Isas and can still be transferred between managers without losing their tax-free status.

Portfolio: The spread of all investments held by an individual or fund

Purchased life annuity: an annuity bought voluntarily where part of the income is treated as a return of capital and is therefore tax-free.

Redemption yield: the return on fixed-interest securities taking into account interest paid and any capital gain or loss at maturity.

Return: The income or capital growth earned by your savings.

Risk: the likelihood that the value of your investment could fall.

Share: a part-ownership of a company.

Term: describes the period of investment - short term is typically one to five years, medium term is five to ten, and long term is ten years or more

Total return: the combined income and capital growth earned by your savings.

Variable rate: an interest rate that fluctuates.

With-profit bonds: investment bonds issued by insurance companies that invest in a fund that holds a mixture of shares, property, fixed-interest securities and deposits. Investment returns are passed on to investors in the form of bonuses that are calculated to smooth out fluctuations in investment markets.

Yield: annual income from an investment in percentage terms.