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Best yield (over 5.6%) with minimum risk?
Comments
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"dunstonh" >> can you provide examples of the other bonds that have yields of 7-10%?
Look up the UK Other bond sector. The highest yield currently is Aegon High Yield Bond at 11.55%. JPM Global High Yield Bond at 8.81%. Over 25% of the funds in that sector currently have yields over 7.3%, However, they are not all the same from a risk point of view so yield alone shouldnt be used.
I will repeat that 3 years isnt enough if you are considering these.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Thanks dunstonh.
Really I'm looking for something with a guaranteed rate of interest.0 -
The interest on the fixed rate bonds (unless it's a fixed rate ISA) will be taxable income."mr_fishbulb" >> what difference does it make if we are higher rate tax payers? Is it an advantage or (I presume) a disadvantage?
If you are a standard rate tax payer you will pay 20% tax on the interest.
If you are a higher rate tax payer you will pay 40% tax on the interest.0 -
Thats a good idea0
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Jeeez - I had no idea about this!
You're taxed at every turn aren't you?! Grrrr.
Is there any way of avoiding this 40% tax? I've filled my ISA and have a pension. How does one get an offshore savings account?!0 -
http://www.bondscape.net/feed.html
Dealing costs could be anything up to £ 30 depending on the broker.
The coupon interest will be paid gross.
If the Bond is bought at less than par (100) then some of the gain will be capital rather than income, so it could be tax free depending on circumstances.'In nature, there are neither rewards nor punishments - there are Consequences.'0 -
If you're willing to take more investment risk than cash accounts you might consider:
30% BlackRock UK Absolute Alpha
20% Cru Investment Portfolio
20% Invesco Perpetual Monthly Income Plus
20% Invesco Perpetual Income
10% Neptune Global Equity
The chart shows how the volatilities differ and why so much is in the more stable ones (colors are red, blue, yellow, green, blue-gray/top in fund order).
The first two are particularly stable, though not guaranteed. Besides the high returns their big advantage for your situation is that the first two and last pay in capital growth, not in taxable interest. So if you have capital gains tax allowances to use you can get the gains free of tax even outside an ISA.
You can buy and sell whenever you like, no tie-ins.
I know that you've indicated that you prefer guarantees but it's worth knowing what's available if you are willing to use alternatives.0
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