I'm taking the plunge.... Retail bonds.

Seanc

Hello all,

After a long time of debating if I what I should do for my plan for the future I've decided to start by buying some retails bonds. I already hold a small amount in cash isa's.

First a big thank you to everyone who post on here, reading old threads and replies is a great way to learn. :T

I just thought I would put it to you all to see if this is the best way of buying retail bonds.

I was planning to buy them through HL. I'm not sure if I can put it within a stocks and shares isa? Can I do this? Or is there any point.

Or is there a better way to buy them. As far as I can work out this is the cheapest way to do it.



Thanks!

xmodz

im with iweb and would recommend them as there is no annual charge to use them and £5 per trade,

you can buy bonds through a isa account yes

xmodz

i forgot to mention unless you chosen bond(s) already, unite offer a bond with around 6% interest

Linton

Bonds can only be put into an ISA if they have at least 5 years to go before maturity. Once bought you can continue to hold them until they mature.

coastline

a few links..

http://www.fixedincomeinvestor.co.uk/x/default.html

http://www.the-diy-income-investor.com/

jimjames

Is there a reason why you are buying retail bonds not a bond fund inside an ISA? You don't have the hassle of holding till redemption and get interest tax free.

Seanc

Thank-you for all your replies.

The reason i am buying them not within a bond fund is that I thought it would save me the annual charge (although I know this sometimes can be discounted).

Just for picking my own bonds. I know that I wouldn't get the growth of the fund, buying them separately.

What would people recommend? Or is it a personal choice thing?

Linton

The danger with buying a small number of bonds is all eggs in one basket. Should a company go bust you lose the lot. In a fund it will be one bond out of hundreds and would not make a serious impact.

If you are only buying the very safest bonds it's less of a problem, but then the returns are low. It may be more lucrative to buy a fund that invests in riskier bonds.

Bond funds are not the same sort of investment as individual bonds. With an individual bond you know that on maturity you will get the face value returned to you. With a bond fund there is no such guarantee.

cashbackproblems

I like Kames High Yield Bond and hold through HL.

jimjames

Linton wrote: »

Bond funds are not the same sort of investment as individual bonds. With an individual bond you know that on maturity you will get the face value returned to you. With a bond fund there is no such guarantee.

Equally you can buy and sell anytime you want with a fund rather than having to wait till redemption or selling via a broker.

Personally if I only had cash ISAs I wouldn't be jumping straight into retail bonds but would look for collective investments first.

Seanc

Ok. That's some great advice thank you. I will look into bond funds more and do some more research.