pibs

blinko

does anyone have any pibs
personal interest bonds.

im seeing a yield of 6.50 on some of them and 12% odd fixed interest surely this is a product that s deserves a mention.

does anyone else have any experience with them

dunstonh

Permanent Interest Bearing Shares is what i think you mean (?)

They don't get much mention as they are generally more suitable for institutions and more sophisticated investors seeking a high variable income and willing to accept a lower level of security than that afforded by Gilts and a fluctuating captital value.  

They are exempt from Captial Gains Tax.  The income is paid gross but is liable for basic and higher rate income tax paid via the tax return.

They are not protected investments under the Building societies investor protection fund.   They also rank behind share accounts on a winding up or disssolution of the society.

Unlike most gilts, you have to find a buyer when you want to sell your holding. This makes them much less liquid. The market is also quite small which means the buyers can often dictate what they want to pay for them.

blinko

thanks DD you are defo the man, thanks for your advice definaetly managed to convince me to look for something else to put my money in for the moment

Milarky

But let's assume you already have £35,000 plus in the building society - and so are 'maxed out' on the investor protection there? In that case have the extra money in a 'pibs' isn't really risking anything further on the unlikely event that a large institution would default is it? [Or am I confusing these two things?]

deemy2004

The £35k is PER Building society or bank !

Also with some PIBS, especially the higher interest ones, the companies can and DO CHANGE their redemption date !