What is a Bond?

PaulCooper

You'll have to excuse my ignorance here, but when a Building Society says they have an X year Bond paying whatever, is this the same as 'putting money into a BS account?
Is there the same government backed security
I am specifically asking in relation to a product offered by the Ipswich BS for SIPPs http://www.ibs.co.uk/savings-and-investments/products/corporates-clubs-a-sipps
Thanks

Paul

opinions4u

It's a generic term for saving or investment.

Traditionally I'd have said a bond was a type if investment (as in stocks and shares or other variable priced assets). But over the last 20 years or so it has been butchered by banks and building societies to describe term deposits - accounts that run for a fixed period of time.

Fixed rate bond.
Inflation rate bond.
Super Saver bond.

All deposit accounts. All different to various investment bonds or government bonds.

There is also Basildon, James and Brooke to consider.

The product from the Ipswich could potentially be covered by £85k FSCS deposit protection or £50k FSCS investment protection. It isn't clear, so you should ask them for that clarity.

PaulCooper

Thanks Opions4U, that clarifies it. I already have money in the Ipswich (closed account paying less interest--- no surprise there then!) and it is covered by the government scheme, not sure which, but I exceed the value.
I realise it's a different question, but isn't money within a SIPP protected by the government to a different level
Paul

dunstonh

it is covered by the government scheme

There is no Govt scheme. It is an industry scheme.

isn't money within a SIPP protected by the government to a different level

Savings fall under deposit protection. Investments fall under investment protection.

gadgetmind

The word "bond" has been so abused over the years that it now means very little, particularly in a retail environment where banks use the cache (why won't this forum allow accents!) of the word to try and add an air of respectability to whatever tawdry tat they are currently pedalling.

LardyCake

gadgetmind wrote: »

... where banks use the cache ...acute accent, where are you!

At the risk of diverting the topic;) perhaps it got lost in this word: cachet?