If you’re looking to get started in the world of investment, bonds could be a better option than riskier and lower value shares. You can find many opportunities to buy bonds from government agencies, companies and other large institutions, such as banks, and start earning interest right away on your investment.
Unlike more variable shares, bonds have a nominal value that you will typically receive in full when the bond matures. This value is usually around £100, which will be paid directly to you along with the interest, and you can spread your investments on the bond market to boost your savings even further.
Like other types of investment, you can buy bonds from stockbrokers, if you’re buying from a company,company or even from your local post office, if you’re buying government bonds. Many collective investment packages also include bonds, but you should always consult with a financial advisor before making any investment you are unsure about. You should also find out about the amounts charged for the purchase of investment bonds, which can vary.
Despite these few considerations, there are many clear advantages to buying bonds, not least the higher amount of interest you can generate compared to standard bank accounts. Bonds are also a much more secure option than many other types of investment, meaning you can look forward to the safe return of your initial investment when the bond reaches maturity, in addition to the extra money it has generated over the period.
Because the interest rate of most bonds is fixed, you also won’t have to worry too much about keeping an eye on the state of the markets, as your earnings won’t decrease over time even during a recession.
If you’re buying government bonds, you can be even more assured of receiving back your money in a timely manner, in accordance with their obligations.
Another ideal option could be tailored investment bonds, which offer medium- to long-term earning potential without a fixed term. Most tailored investment bonds will be taken out for at least five years, and this longer period brings greater savings, as well as tax-deferred withdrawals up to a certain allowance each year.
These investment bonds are well-suited to investors looking to earn a large return on their savings, with single payments up to £15,000 being permitted in more than 140 investment funds, with different fund managers. This means you could enjoy greater freedom, security and savings with tailored investment bonds.
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