In a climate of low inflation and consequent low interest rates, investors may face a severe reduction in their income.
In such an environment, traditional Bank and Building Society accounts are less able to offer attractive fixed interest rates and often do little more than keep pace with inflation.
Alternative high fixed rate investments can be used to generate high income but these products may not be suitable for all investors as they often involve complex and unlimited risks to capital.
However, if you are able to take a five year view and have already set aside emergency funds, you may wish to consider a Guaranteed Equity Bond.
A Guaranteed Equity Bond will typically back an index or basket of shares and most of the capital issues do not require growth on the underlying index or assets to return the capital in full.
Many products have downside protection and this helps to reduce the risk profile when compared to directly owned equities, unit trusts or investment trusts.
With major markets significantly off their highs this could be a good time to invest.
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