Investment Bonds Explained (not Premium, Corporate or Government Bonds)
Investment bonds are often confused for other things – that word ‘bond’ means too many different things in personal finance.
We’re not talking about Premium Bonds – those are tax-free savings accounts from NS&I. We’re not talking about Government or Corporate Bonds – those are assets that produce an income and are usually held inside funds in your ISA or pension. And we’re not talking about Deposit Bonds – those are fixed-term deposit accounts with banks or building societies.
We’re talking about investment bonds – so what are they and why are they being considered again after being out of favour for ages? We’re going to look at what they are, how they are taxed, what happens when you take money out, some use cases, a couple of anomalies and I’ll compare them with investing in an ordinary general investment account.
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