bonds 8%

as you guys are aware the rates on banks have gone down heavily. the pounds value all but crashed.
https://www.londoncapitalandfinance.co.uk/security i found this site and suggests a bond of 8% return over 3 years
but being a saving for dummies candidate i ask what is a bond and is their higher risks to me getting my money out

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  • Browntoa
    Browntoa Posts: 49,272
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    LC&F is dependent on Borrowing Companies to repay loans

    LC&F makes loans to Borrowing Companies and is reliant on these Borrowing Companies to repay the loans LC&F grants in order for LC&F to be able to make payments of principal and interest to Bond Holders. If a significant volume of loans fall into default, LC&F may not have sufficient funds to be able to pay principal and interest to Bond Holders within the timescales of the Bond.
    Proceeds of the realisation of security

    The Bonds are secured by a debenture over the assets of London Capital & Finance Plc. There can be no assurance that, in the event that this security is realised, the amounts realised will be sufficient to satisfy the obligations to repay principal and accrued interest under the Bonds.
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  • so investing 5k in this could lose me the interest or both the initial 5k and the interest
    currently i'm with virgins instant isa and gaining less that 1% from them
    when i first joined i was on 2.11% so need to assess my poor nest eggs of just 5.2k
  • their is also a 3.9% over 1 year and a 6.5% over two would this be a safer option even though a lower payment percentage it's less time to be risking my life savings
  • MallyGirl
    MallyGirl Posts: 6,515
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    you can get better rates of return than that from a bank account without risk - unless you are already doing that
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  • Thrugelmir
    Thrugelmir Posts: 89,546
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    Corporate bonds are nothing new. Risk is priced. The higher the coupon the higher the risk of default. Are you saving or investing?
  • i'd like to think i'm a prudent man but only out of educating myself over. however i've a wife that is determined to make us live as poor men.
    I'm currently trying to save so any high % accounts would be a godsend thanks
    this is of course hidden from the wife who would spend the lot if she could
  • MallyGirl
    MallyGirl Posts: 6,515
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    it depends how much you want to work for the interest.

    take a look at:

    http://www.moneysavingexpert.com/banking/compare-best-bank-accounts#interest

    you can 5% on £2.5k with nationwide but only for a year, but they also have a 5% regular saver for £500 per month. Then you need to move the money elsewhere
    etc, etc
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  • adindas
    adindas Posts: 6,803
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    edited 19 October 2016 at 5:40PM
    as you guys are aware the rates on banks have gone down heavily. the pounds value all but crashed.
    https://www.londoncapitalandfinance.co.uk/security i found this site and suggests a bond of 8% return over 3 years
    but being a saving for dummies candidate i ask what is a bond and is their higher risks to me getting my money out

    "8% over 3yr". Does it mean 8% /3 = 2.67% per annum or 8% per annum ??
    Any direct link to this product ??
  • you have to invest 5k or more but the example shows 5k invested 400 pound per year so 3 year plan pays out 6200 5k of which was your initial investment

    my only concern is the risk if any, hence the post
    this link should explain better https://www.londoncapitalandfinance.co.uk/bonds
  • adindas
    adindas Posts: 6,803
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    edited 19 October 2016 at 9:28PM
    you have to invest 5k or more but the example shows 5k invested 400 pound per year so 3 year plan pays out 6200 5k of which was your initial investment

    my only concern is the risk if any, hence the post
    this link should explain better https://www.londoncapitalandfinance.co.uk/bonds

    Your capital is at risk as it is not covered by FSCS.No womder they could provide such a high return.
    "Investing in bonds means your capital is at risk and payments are not guaranteed if borrowers default"

    So it will depend on your attitude to risk as you might loose your capital as well.

    Another thread discussing this Plc
    http://forums.moneysavingexpert.com/showthread.php?t=5346049

    Another article.
    http://www.telegraph.co.uk/finance/personalfinance/investing/bonds/11005195/What-lies-behind-this-eye-catching-7pc-savings-bond.html
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