Best Fixed Income Investments

Compare Best Fixed Income Investments


"If you would like the opportunity to receive a higher return than might be currently available from FTSE-linked income plans, you may wish to take a look at our range of the best fixed income investment plans that are currently on offer to investors. These capital at risk plans could offer the potential for a defined return throughout the duration of the plan. See the tables below for our latest selection of the best fixed income investment plans."

Oliver Roylance-Smith , Head of Investments and Savings   

 

Investing for Fixed Income
ProviderPlan NameCounterpartyISA OptionTermAnnual IncomeMore Info
FTSE 100 Enhanced Income PlanInvestec Bank plcyes5 years

4.35%

fixed income

More Info >
  • 4.35% income pa paid regardless of the performance of the FTSE 100
  • Monthly income
  • Available for ISA, ISA transfer and direct investment 
  • Investment deadline for ISA transfers - 13 October 2017
  • Investment deadline for direct and ISA applications - 3 November 2017
  • Capital is at risk if the FTSE 100 Index has fallen by more than 40% at maturity from it's initial level, in which case your initial investment will reduce by 1% for each 1% fall
  • Minimum investment £3,000
  • An arrangement fee applies to this plan
  • Product designed to be held for the full term
Important Information: Structured investment plans are not capital protected and are not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.

What is a fixed income investment?


The fixed income investment - also known as a reverse convertible - is a fixed term investment where the level of income received is fixed at the outset and is paid to you regardless of the performance of any specific shares or the stock market as a whole. The return of your initial investment is however determined by the stock market, which in most cases is based on the performance of the FTSE 100. 


A fixed income investment plan aims to pay investors a set rate of income over the course of the plan - for example, your income may be paid on a monthly, quarterly or other basis. As the name suggests, a fixed income investment offers a pre-defined rate of income, rather than a variable income such as may be on offer from other types of income investment plan. 


In order to receive fixed returns that are currently far higher than those available from cash, the investor’s capital is put at risk. This means that although your income is fixed, whether you receive a return of your original capital at the end of the investment term is dependent on the performance of the stock market, normally the FTSE 100 Index. Please note that the past performance of the FTSE is not a guide to future performance. 


Features of fixed income investment plans


Because the income received via a fixed income investment plan is not reliant on the performance of the stock market, investors have the benefit of knowing at the outset exactly how much income they will receive and when it will be paid. This certainty of income and timing is undoubtedly playing a key role in their popularity. 


In comparison to many other investment plans on offer, fixed income investment plans can be quite easy to understand. They offer a fixed return over a fixed period - usually around 5 or 6 years - providing a defined period during which your capital is invested. This combination of a pre-determined fixed income paid over a fixed term creates an investment that is easy to compare with other income investment options available in the market. 


Since your fixed income investment is used to buy securities issued by the institution offering the plan (normally a bank), one feature that is important for investors to understand is counterparty risk. This is the likelihood that a particular institution will be unable to repay any money owed which could therefore potentially have an impact on your returns which is separate to the performance of the underlying index.


There are a number of credit ratings available provided by leading credit rating agencies such as Standard & Poor’s, Fitch and Moody’s and although these are only one way of assessing the counterparty to each individual plan, they do provide a useful starting point. In addition, a recent development has seen some plans offer the option to spread this risk by using a number of counterparties although the potential fixed returns on offer will be slightly lower. 

 Important Risk Information:

This website contains information only and does not constitute advice or a personal recommendation in any way whatsoever. The value of investments and income from them can fall as well as rise and you may not get back the full amount invested. The tax efficiency of ISAs is based on current tax law and there is no guarantee that tax rules will stay the same in the future.

Different types of investment carry different levels of risk and may not be suitable for all investors. Please ensure that you read the Important Risk Information for further details. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular investment and should read the product literature. If you are in any doubt as to the suitability of a particular investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.