Businesses should invest in bonds as well

Anyone with enough financial nous to be running their own business is likely to know the benefits of investing their savings.

This is not only a great idea for individuals or families. It can be a great tip for businesses as well. For this reason, a number of business owners are keen to invest their company’s spare funds in business savings bonds.

Most business savings bonds are available to all types of businesses, whether they are sole traders, partnerships, LLPs, limited companies or registered charities. Most will require a minimum investment from the firm.

As long as business owners are confident that they definitely won’t need access to their surplus funds for a certain period of times, they can benefit from interest rates which are typically higher than most business deposit accounts.

Just as with individual deals, business owners will have to wait until the bond matures before they can spend their profits. A lot of business savings bonds will offer firms a fixed rate throughout the duration of their bond. Whether this will benefit a business is down to how interest rates are expected to perform during this period. There is a risk that some bonds won’t be as profitable as forecast – but they generally less high-risk than other investments like stocks, shares or even property.

Any business with money stored away for the medium to long-term future should definitely not leave it sitting in a low interest business bank account. Business savings bonds are a relatively simple way of storing your money and letting it do the hard work so you don’t have to.

Business owners are advised to shop around for the best deal when it comes to finding somewhere to store away funds.

Many banks will offer their customers a variety of unique terms and conditions, so it is worth weighing up a few bonds before deciding which will be the most worthwhile.

The Cambridge Building Society is an independent, local, mutual society. It aims through responsible administration to offer competitive building society savings rates to both savers and borrowers; and to provide market leading service to the community from conveniently situated offices.

http://www.TheFinancialCoach.com The Financial Coach Bryan Binkholder answers the question of: Are bonds good investments?
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