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Index Linked savings vs Guaranteed Equity Bonds
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kriandor
Posts: 3 Newbie
Hi all. I'm a first-time newby here so apologies if this has all been covered before!
I want to invest some money over a fixed term, and I've been advised to start with National Savings. The Guranteed Equity Bond option looks good but I've heard that they're not all they're cracked up to be.
Anyone thoughts anyone?
I want to invest some money over a fixed term, and I've been advised to start with National Savings. The Guranteed Equity Bond option looks good but I've heard that they're not all they're cracked up to be.
Anyone thoughts anyone?
0
Comments
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Stay clear of Guaranteed Equity Bonds. They don't pay you the income that you'd get from dividends, and if you get a bad run you'll often end up with nothing to show for your money over the period you've locked it up for.
If you want to save money, use a savings account or product, if you want to invest then buy some investment products. Mixing the two like this just doesn't seem to result in a great product for anyone but the provider!I am a Chartered Financial Planner
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.0 -
Guaranteed equity bonds are mainly rubbish. They are for the inexperienced adviser or sales distribution channel to sell easily to people that couldnt tell a good investment from bad.
There are better investment option with guarantees (ie. you keep your dividends and your unit value and guarantee only kicks in if its lower after 5 years). You can also build your own GEB if you wish. Whilst not identical it gives an indication of the level of loss you would have to suffer to actually break even. When you realise that, you will see the GEB is a complete waste.
Take a look at this old thread on why they are not any good and how to build your own GEB:
http://forums.moneysavingexpert.com/showthread.html?p=2728519#post2728519I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I assume that you have already maxed out your ISA.
After this, if you want to save more (not invest) then Index Linked certs are a good option, assuming you are a tax-payer.
As the other two psoters mention, GEB's are quite poor products and should be avoided.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Once again like the others, avoid GEBs in my opinion.
However NSandI Inkex Linked Certifications are a good option if you are a tax payer, and an almost unbeatable one if you are a high rate tax payer.
Most info and discussions on these threads:
http://forums.moneysavingexpert.com/....html?t=528781
and
http://forums.moneysavingexpert.com/showthread.html?t=6059340
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