Age discrimination - is this correct?

Onawingandaprayer

D1zzy wrote: »

Clearly I'm a bit dense-

In real terms what does that mean for the "investor". How do I know if I've got a bond or a fixed term acount - and does it matter anyway.

My wife and I had four with-profit bonds (which presumably were bonds) which we were mis-sold and ended up successfully being compensated for by the FSCS.

Now my dad has a Natwest Fixed rate bond (presumably not a bond) which is paying him 6.6% per annum, until November next year.

I know which I'd prefer!

dunstonh

y wife and I had four with-profit bonds (which presumably were bonds) which we were mis-sold and ended up successfully being compensated for by the FSCS.

They are not bonds either. They would be investment bonds from a marketing point of view but would either be single premium whole of life assurance plans or single premium endowments. The misuse of bond on investment bonds is much older than fixed term deposits.

Now my dad has a Natwest Fixed rate bond (presumably not a bond) which is paying him 6.6% per annum, until November next year.

Depends on whether its a fixed term deposit or a guaranteed equity bond (incorrectly called bond but correctly called structured product). Banks do like to market their structured products to people used to fixed term deposits.

I know which I'd prefer!

Depends on the provider and requirements. I have a few Aviva and Pru with profit "investment bonds" on my books that are running in excess of 6.6% p.a. net. If it was a zombie WP fund provider though, the fixed term deposit would win easily.

Onawingandaprayer

dunstonh wrote: »

You looked it up in an American dictionary and it shows its not the right thing either. Try looking up fixed term deposit. )

Why should I look up fixed term deposit if I want to know what a bond is?
I hate to be picky, but will be as we seem to be in a pedantic argument.

Collins ENGLISH dictionary defines a bond as "a certificate of debt issued to raise funds. It carries a fixed rate of interest and is repayable with or without security at a specified future date."

Seems to me the finance industry has hijacked the Bond word and applied it to suit their own devices. I don't think anyone can categorically come up with a 100% correct definition

gozomark

Seems to me the finance industry has hijacked the Bond word and applied it to suit their own devices - correct, but its not (merely) a pedantic arguement, as alot of misselling/misunderstanding is caused by people not realising that savings and investments are very different, and the confusion of what a bond is, is all part of this.

Collins ENGLISH dictionary defines a bond as "a certificate of debt issued to raise funds. It carries a fixed rate of interest and is repayable with or without security at a specified future date - correct, but not everything that carries a fixed rate of interest is a bond.

dunstonh

I hate to be picky, but will be as we seem to be in a pedantic argument.

Arguing over fixed term deposits correct name is. However, when the term "bond" can be incorrectly applied to many different products with different terms and rules, it is important to verify that the some product is being talked about.

The OP mentioned bond. I suspect its a structured product (guaranteed equity bond). You assumed it was a fixed term deposit (bond). Both have bond in the marketing title but both are very different products and fall under different FSCS protection rules, have different levels of risk and one is an investment and the other is a deposit.

Collins ENGLISH dictionary defines a bond as "a certificate of debt issued to raise funds. It carries a fixed rate of interest and is repayable with or without security at a specified future date."

So what? Lots of things pay interest but it doesnt make them a bond. A structured product can pay interest assessable under income tax rules but that isnt a fixed term deposit and it isnt a bond. Where is the certificate of debt that you have?

If you look up fixed term deposit you will get things like "means an interest bearing deposit lodged for a fixed period."

Seems to me the finance industry has hijacked the Bond word and applied it to suit their own devices.

Exactly the point being made. The marketing departments use names and terms that may not be technically correct and it can create confusion.

Onawingandaprayer

"Exactly the point being made. The marketing departments use names and terms that may not be technically correct and it can create confusion. "

So who's to decide what is technically correct? You, I assume. (Esp as we haven't heard from the OP as to what their original post was referring to.)

dunstonh

So who's to decide what is technically correct? You, I assume.

Yes. me. And anyone else who is qualified in financial services or has a degree in economics or any sort of investment background that knows the difference in the products. Generic product types are the sort of thing that gets taught at a very basic level.

However, to help you, here is a link that explains a bond:
http://www.incademy.com/courses/Gilts-and-bonds/What-are-bonds/1/1067/10002

Here are the different types of bonds:
http://www.incademy.com/courses/Gilts-and-bonds/What-are-bonds/3/1067/10002

Here are the asset classes (which shows bond and deposit)
http://www.incademy.com/courses/First-principles-of-investing/The-major-asset-classes/3/1003/10002

It is well known that the term "bond" is one of the most misused terms out there. So, I dont know why you are taking such a stand against that.

(Esp as we haven't heard from the OP as to what their original post was referring to.)

We havent. We have had to make some assumptions. We do know that the bank has an age restriction on its regulated advice products (advice to over 70s). The fixed term deposits are not regulated products and dont require an adviser. The 5 year Barclays fixed income bond (structured product) is a regulated product and does require an adviser and falls under the over 70s rules.

The assumptions may not be right and its possible the person at Barclays made a mistake by saying the fixed term deposit wasnt available by mixing it up with the Fixed Income Bond. Its possible that whilst the bank clerks can open up the fixed term deposits, the advice process for their advisers prevents them recommending anything with a term longer than 5 years. Salesforces do often have rules that restrict them in various ways.

D1zzy

gozomark wrote: »

if you are saving, you have a fixed term deposit

Thanks - so my new NBS 5 year bond - is it a bond is a fixed term deposit?

gozomark

difficult to tell on what you have said - do you have a link to the product ?

edit : is that Newcastle BS, and their new savings product ? If so, its a fixed term deposit, ie savings

D1zzy

Thanks
Sorry rubbish typing & thought processes (must drink more coffee!)- yes the new 5% "5yearbond" is savings so not a bond.