Did you know?
£56,058 was the average household debt (including mortgages) in February 2012.
Source: Credit Action (www.creditaction.org.uk)
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Income Bonds
As bonds go, income bonds are somewhat precarious, but you still may want to include them as part of your investment strategy. Income bonds are designed to make interest payments only when the issuer generates enough revenue to meet those payments. The principal will definitely be paid back, but it is possible that income bonds may not yield any return whatsoever. Read more...>
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Investec FTSE 100 Bonus Income PlanAnnual income 7.00% |
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Bonds are designed to provide investors with a return in exchange for investing in a bond issue. This return is usually interest paid to the investor at pre-arranged times during the term of the bond, or when the bond matures. Interest rates may be variable or fixed, and if all goes as planned, the investor can get a decent return with this type of bond. Income bonds will specify that the issuer has to generate a certain amount of revenue before it's obligated to pay interest to the investor. So, if the issuer doesn't make enough revenue during the life of the bond or the period in which the bond life is divided up, the investor won't get any return for that period. But the upside is that income bonds usually offer a slightly higher interest rate to the investor.
Companies that are trying to recover from financial problems or avoid bankruptcy may issue income bonds as a way to raise money. As a result of this, you should make sure the bond issuer is going to recover and thrive enough to earn the necessary revenue to enable them to pay interest to you should you choose this type of investment.
As with any type of investment, you must look at the terms of the income bonds and read all the fine print before investing in them. If the income bond has a variable interest rate, it may have a tiered interest payment schedule. This will give you some idea of the level of return you, the investor, can expect. Always map out the worst case scenario, and never raid your entire savings accounts to buy income bonds.
Saving Accounts Blogs
- What ISA To Get In The New Tax Year? 26 Apr 2012 | Read More ›
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- Customer Service at Premium Rates! 9 Feb 2012
- What does 2012 hold for UK personal finance? 18 Jan 2012
Product Offers
Please ensure that you fully read the terms & conditions of any product or policy before you decide to proceed and are fully aware of the total costs and the benefits and any exclusions or limitations applicable to the product or plan.
Please note that the product links will take you direct to the Issuer or Insurer's site direct and we cannot be held responsible for the information which they provide within their own sites. On some comparison tables we use a star rating which rates products by visitor popularity.
Please ensure that you fully read the terms & conditions of any product or policy before you decide to proceed and are fully aware of the total costs and the benefits and any exclusions or limitations applicable to the product or plan.
Please note that the product links will take you direct to the Issuer or Insurer's site direct and we cannot be held responsible for the information which they provide within their own sites. On some comparison tables we use a star rating which rates products by visitor popularity.