Bonds come in many forms and are a way for corporations or governments to raise funds. Bonds are a certificate of debt and the issuer has to repay the investor on the maturity date (often 12 months or longer for corporate bonds). Bonds issued by governments are called government bonds and are often referred to as ‘Gilts’ or ‘Gilt Edged Stock’ in the UK. Corporate bonds are issued by corporations and you can also invest through Bond Funds or high yield bonds. Each carries different levels of risk and potential returns so it’s important to do your research and take advice if necessary. Most bonds pay fixed interest usually twice per year and if the investor waits for the bond to mature they will receive a fixed repayment. Bonds can also be traded on the stock market where factors such as interest rates and market expectations will affect their value.
Your financial advisor will be able to advise you further and for comprehensive, impartial information
visit the
FSA Money Made Clear website at
www.moneymadeclear.fsa.gov.uk.
For information on Bonds world wide visit Wikipedia: Bonds: http://en.wikipedia.org/w/index.php?title=Bond&oldid=45095121
Looking to invest in bonds or gilts? Visit www.moneyjungle.net/directory
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