Guaranteed Income Bonds (GIBs)

What is a Guaranteed Income Bond?

Guaranteed Income Bonds (GIBs) are offered by insurance companies, and guarantee a fixed income (or growth) over a fixed term in return for a single premium. The original investment is repayable in full at the end of the term. There is no stockmarket link on these products.

 

How Much Can I Invest?

The minimum investment is £5,000, with a maximum typically of the region of £1,000,000.  The investment is made for a fixed term ranging from 1 year to 5 years, however if you are investing for growth, the minimum term is 2 years.

 

What Are The Charges?

Any charges the issuer of the bond makes to cover its administration costs are usually implicit, meaning that they have already been taken into consideration before the level of return is calculated. This means that there are usually no further charges applied to the contracts provided the bond is not cashed in early.

 

Can You Encash Early?

Most forms of guaranteed bonds must be considered as investments which are fixed for the term of the contract. Companies that offer them usually charge penalties for redeeming the bonds early, and in any case the return received will depend on stock market conditions at the time of the encashment.

 

What Protection Do You Have?

Investments into guaranteed bonds have very strong protection should anything happen to the company you invest with.

Unlike investments with Banks and Building Societies, there is no maximum protection offered, with the first £2,000 protected in full and any amount above this has 90% protection.