Reliable returns from fixed interest bonds
Fixed interest bonds offer a fixed rate of interest to investors, and usually run for an agreed time, known as the ‘term’ of the bond.
There are a range of fixed interest bonds interest rates available, which are usually higher, the longer you are prepared to leave your money invested in the fixed interest bond.
Are you interested in saving in fixed interest bonds? Make an online investment enquiry, or call 0800 678 5929
Fixed interest bonds have no minimum age for investment and some can be set up with a very small sum. However, it is important to note the term of the fixed interest bond, and to leave your cash invested for the entire term, in order to enjoy the full benefit of fixed interest rate bonds.
Interest earned in a fixed interest bond may be paid monthly or annually, and with many fixed interest rate bonds can be paid into a separate bank or building society account. Alternatively, there are fixed interest bonds available which will pay the interest back into the bond, usually on an annual basis.
Savers in fixed interest bonds will normally receive a written statement, at least annually, updating them on the performance and interest payable on the bond.
Returns from fixed interest bonds
The return on your savings or investment in a fixed interest bond will depend on the amount invested, the interest rate offered when you first place your cash in the fixed interest bond, and the length of time you agree to leave your cash in the fixed interest rate bond.
Please note that some fixed interest rate bonds carry a penalty, if you decide to cash in before the end of the bond’s term.
Fixed interest rate bonds are relatively stable, safe investments suited to those who wish to take little risk with their savings and investments. It is important, when setting out on a fixed interest rate bond investment, to be aware of the terms and conditions of the bond, and in particular to look only at fixed interest rate bonds whose term corresponds to the time period for which you are prepared to put your money away. As was mentioned, if you choose a 5-year fixed interest bond, but then require your cash back after just 3 years, there may be a penalty to pay.
In order to avoid disappointment, it is also wise to ask your independent financial adviser to compare fixed interest bonds interest rates on your behalf, as these are crucial to determining your return from fixed interest bonds.
Fixed interest bonds typically invest in bonds or securities issued by the UK government and UK companies, or in UK index-linked bonds. Some fixed interest bonds invest in a blend of these categories.
Are you interested in saving in fixed interest bonds? Why not make an online investment enquiry, or ring our freephone 0800 678 5929 now
