Financial Services > Investments > Investment Bonds > Guaranteed Income Bonds

Guaranteed Income Bonds

Guaranteed Income - safe, regular income. Just like it says, a guaranteed income bond means a cast-iron, regular income from your investment.

Although a simple product, this investment should be approached with caution. A guaranteed income bond may assure you of a set level of income throughout the time period - typically from one year to 10 - but the return on bonds generally can rise or fall meanwhile during this time period. You are, in effect, locking yourself in as you would with a long term fixed rate mortgage deal. However, your capital is normally guaranteed to be safe, and is returned provided the bond is held until maturity.

 

On the positive side, they are definitely a low risk investment. Income can be taken monthly or annually - see the tax guide for details of how income is taxed.

For those who opt for a monthly income option, a payment is paid direct into your bank account normally at the beginning of the month. If you prefer income paid annually, it is usually paid on the policy's annual anniversary. Like so many other income products, if you decide to cash in the bond before it matures there will certainly be penalties, and well may not receive the full amount of capital back. Check the terms offered by the provider before committing yourself.

Below are links relating to Investment Bonds:

Are you making the most of your ISA limit this year? For the current best performing ISAs, visit us at www.Investments.co.uk/ISAs

 

UK Investments - Financial, Property & Other Investments - 1998-2008

Investments Newsletter

Investments Newsletter