Guaranteed Income Bonds
Guaranteed Income Bonds (GIBs) are offered by insurance companies, and pledge a fixed income over a certain amount of time, from one to five years.
What is a Guaranteed Income Bond?
A Guaranteed Income Bond (GIB) is a life assurance based investment which guarantees to provide a fixed income over a fixed term. The original investment is guaranteed to be repaid in full at the end of the term. The term is usually between three and five years.
Who Are They Suitable For?
Guaranteed Income Bonds are suitable for people who want to achieve a known fixed level of income over a given period of time, and the guarantee that their investment will be returned to them.
What Should You Look Out For?
Income from UK based GIBs are paid net of basic tax, which cannot be reclaimed even by non-taxpayers. Higher rate taxpayers may be subject to additional income tax liability on the interest payments.
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