Introductory rate

A temporary bonus forming part of a headline savings rate for a stated period, after which the account reverts to a lower standard rate.

Example

4.50% including a 2.00 point bonus for twelve months, reverting to 2.50%, works out at 3.4952% a year over two years - behind a flat 3.60% account, which ends 43.42 ahead on 20,000.

Important

The headline rate and the rate you will hold for most of the period are two different numbers. Compare accounts over the period you actually intend to leave the money there, not over the bonus window.

Related terms

• Annual equivalent rate — A rate restated on a like-for-like annual basis, so accounts that add interest at different frequencies can be compared against each other.
• Bank deposit — Money handed to a bank in exchange for a claim on it. The bank owns the money and lends most of it out; what you hold is a debt that institution owes you, repayable on the terms of the account.
• Opportunity cost — What you give up by choosing one use of your money, or time, over the next-best alternative.

Lessons that explain it

• Appraising one account: rate, access, cover and the expiry date — Six checks on one specific account. The headline rate is the one everybody runs and the only one that can be withdrawn without warning - so it belongs fourth, not first. (12 min)

All 578 terms in the Investing glossary