We all work hard to be able to be able to afford the things that we need, from the necessities to the extra things that make life worth living. Recently a growing number of people are thinking ahead and saving money for a range of reasons from holidays, for retirement, to save a deposit for your first house or to pay for our children to go to university.
One of the most popular options available is savings bonds. Savings bonds are popular because they are one of the safest ways to invest your extra cash and you know what return you will get.
So what makes savings bonds so safe? It is because when you put your money in a bond, the Government guarantees that you will get your money back – up to a value of £50,000 or £100,000 if you’re a couple. That means that the government is supporting and backing up your investment. This makes bonds very stable. In addition you will be constantly earning more money via the interest that you are paid for having put your money into the savings bond.
Of course there are different terms and conditions you need to be aware of before you immediately invest all your money: Savings bonds are usually taken for a fixed term. This can range from one year to five years plus and you decide the term before you invest your money. However, once you have invested in a bond, you usually cannot sell or cash in the bonds prematurely. That means you can’t get your money back until the end of the term that you have agreed, so you really have to wait for the bond to mature before you can benefit from it.
Savings bonds are also non-transferable. To some this is a good thing because your money is guaranteed only to be paid back to you, then investor, but it does mean that you can’t sell them, or use the bonds as collateral.
Perhaps the biggest advantage of savings bonds is that you know what rate of interest you are going to receive from the outset. This rate, once agreed, cannot be reduced by the bank or building society, even if other rates go down, so whatever you expect to get you will receive. Compared with stocks and shares, there is no risk, no loss and no investment meltdown with a bond.
Shrewd investment is a good start for a bright future. We work hard for our money and we need it to work hard for us in return. Investing in savings bonds is probably one of the most secure ways you can plan for your future.
