Insurance Company Income And Growth Bonds

Where from? Insurance companies, through financial advisers.

How they work You invest a lump sum for a fixed period of time which is different for different bonds - for example, two years or five years. The return is fixed at the time you invest, and either accumulates to be paid out when the bond comes to an end or is paid out regularly as income. You can't usually get your money back early.

Minimum investment Varies, for example £1000 or £4,000. Maximum investment None.

Tax Varies. With all, the return is paid with the equivalent of basic rate tax already deducted. With some, non-taxpayers can reclaim the tax paid, with others they can't. Basic rate taxpayers have no more tax to pay. Higher rate taxpayers may have to pay extra tax. Check the tax position before you invest.

Good for Anyone seeking a fixed return and who can leave their money for a time. Some are useful for non-taxpayers, but check tax position before you invest. People who think interest rates might fall.

Bad for Anyone who might need ready access to their money.

National Savings Income Certificates

National Savings Income Certificates

National Savings Income Bonds

Where from? National Savings Bonds & Stock Office, Blackpool FY3 9YP (forms available through post offices)

How they work You invest a lump sum. The value of your capital can't fall and earns interest which is paid to you monthly. Withdrawals require three months' notice and must be in mulTIP - les of £4,000. If you want your money back within the first year, your rate of interest is halved. You must keep a minimum balance of £4,000 in the bond.

Minimum investment £4,000 and multiples of £4,000 after that.

Maximum... see: National Savings Income Certificates

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