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Taking out an Investment Bond

An investment bond is a good place in which to house a range of other investment funds. If you enjoy investing and have knowledge on the advantages as well as the risks, you can have as many investment funds as you like in your bond. If you are less clear about the rules of investing you are better off starting small with your investment bond and increasing it gradually, if you that is what you want to do.

When you originally take out an investment bond, you are given a certain amount of units equal to your monetary investment. The initial deposit is not a set amount but is usually between £1000 and £10,000.  Because of the way tax is calculated on these bonds, it is also a text efficient way to hold funds in one place. Some bonds also offer basic life insurance cover meaning in the event of your death your estate will receive a small lump sum on top of the returns from your investment bond.

Many people take out investment bonds as an easy way to put money away for their retirement. Because you can choose how returns are paid, this means it is easy to let it accrue and become a nice little nest egg for when you decide to finish your employment. You do have to exercise caution with an investment bond, just as you would any other kind of investment. They can be affected by inflation and dips in the economy. For these reasons investors are always warned there may be a chance their final return is not as much as their initial deposit. To minimise the risks you can take out insurance as well as seek the advice of an investment expert.

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