Fixed Rate Bonds

Misterboy

Hi all, I have been scouring this forum on savings and investments. I will soon gave a large sum to invest. Are fixed rate bonds a good shout. Don't really know anything about these but there is a bond that pays 8.9% Any thoughts or advice please?

Alter_ego

8.9% is a fantastic return. However if something looks too good to be true........................

Misterboy

For a 5 year investment there's one that pays 9.9%.
I believe there are risks?

Alter_ego

Misterboy wrote: »

For a 5 year investment there's one that pays 9.9%.
I believe there are risks?

Do you mean 9.9% annually?

Misterboy

Yes the website says that, with interest paid quarterly. I tried posting the link but that's not allowed as I am a newbie.

Ballard

For a bond to pay such a high rate of interest it's likely to have risks attached which would mean that you mightn't get your money back. Even if there is little risk attached you'll pay a premium to buy it which would bring the yield down towards the market norm. It could even be a mixture of these two scenarios.

To explain briefly, a bond has a price and if it costs the face value this price will be 100. Anything above that is a premium so 110 costs 10% extra.

Alter_ego

You could post the link with a gap in it & someone could fix it.

isasmurf

Are you looking at Blackmore?

Misterboy

Yes, Blackmore, Zopa and Funding Circle.

Shashy

Misterboy wrote: »

Yes, Blackmore, Zopa and Funding Circle.

It depends on how much risk you'd like to take with your cash.

Blackmore is a 'capital at risk' investment, and isn't insured. I wouldn't personally touch it with someone else's.

Misterboy

Thanks for that. That's one investment option we won't be looking at then.