Bonds / UK Bond Investment
A bond or investment bond is essentially a loan where the bond owner has 'invested' a sum of money, usually in a company, to use at any time. For the investor it is like an account where the money is left for a fixed period of time.
Interest is paid to the investment bond holder or owner by the bond issuer, over the term of the investment, with the initial amount invested being paid back at the end of the investment period.
As the bond is basically a loan, the bond holder does not own part of the company. Bonds are often referred to as being debt securities as the issuer has a debt obligation to the investment bond owner.
Most bonds will have these terms associated with them:
Coupon - the interest rate that will be paid over the term of the investment bonds, which is usually a fixed rate.
Maturity - refers to the date that the issuer will pay the principle to the bond holder, essentially paying off the debt.
Principal (face value) - the amount that will be paid to the investor at the maturity of the investment bond.
Occasionally bonds issued by insurance companies are referred to as investment bonds. For more information on these please click on insurance bonds below.
There are many types of investment bonds available. Here are a few of the main ones:
If you require further information regarding UK bond investment please feel free to use the links below:
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