Growth bonds will usually require you to keep your capital locked away for an agreed period of time, usually for a period of five years in order to provide you with some level of growth.
Like all investment products, growth bonds are not always right for everybody. However, because of their structure, they may be right for you if:
- You want the potential returns associated with a stock market linked product
- You a looking for a medium term investment
- You are looking to make the most of your tax efficient ISA and SIPP allowance
- You are prepared to accept a degree of risk that your capital may not be returned in full at maturity
But, growth bonds might not be right for you if:
- You want guaranteed returns and the certainty that you might not get back the full amount of your capital at the end of the term
- You think you might need instant access to your capital
- You do not want the element of risk associated with stock market linked investment products
See the table above for more information about specific growth bonds, and click on the links to apply for product brochures.
With structured investment products like growth bonds, the safety of your original capital depends on the ability of the counterparty (the institution providing the underlying assets, rather than the product provider) to repay your investment at the end of the term. You can assess the strength of a counterparty, and therefore the relative risk to your investment, by comparing their credit rating score, from AAA to D, using a credit rating agency such as Standard & Poor's (www.standardandpoors.com) or Fitch (www.fitchratings.com).