Retail bonds explained
Learn about retail bonds, charity retail bonds and how to invest in them
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What are retail bonds?
Like other bonds, retail bonds are a type of loan and are a way for retail companies to raise funds in exchange for a fixed rate of return over a set period of time.
- As with other bonds, retail bonds are not covered by the Financial Services Compensation Scheme and so it is important to understand what level of risk you might be exposed to as companies can become insolvent.
- The yield offered will vary and it is useful to know that buying and selling bonds will be affected by UK interest rates. If savings rates for cash is higher, the demand for bonds will diminish, which could make it harder for you to sell.
Investment Risk Warnings
The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance.
EQi does not provide investment advice. If you are in any doubt as to the risk or suitability of an investment or product you should seek advice from an independent financial adviser.
The extent and value of any ISA tax advantages or benefits will vary according to the individual's circumstances. The levels and bases of taxation may also change.
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Charity retail bonds
One of the appeals of bonds is their diversity and the opportunity to put your money to work for good causes.
- Charities issue them in order to raise money and expand their activities and they are traded on the London Stock Exchange. As with other bonds, the charity pays interest on the loan at fixed times and will repay the loan at the end of the term.
- Rather than individual charities issuing securities, the bonds are issued by a special purpose vehicle called the Retail Charity Bonds plc. It is governed by an experienced and independent board of directors who act on a pro-bono basis and review applications from established charitable organisations.
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Resources
Retail Charity Bonds plc
Looking for a fixed income investment opportunities? Consider Retail Charity Bonds plc. This organisation provides fixed income investment opportunities which support UK charities. For more information, visit their website.