Glossary: Guaranteed income bonds

GIBs are offered by life companies, pledging a fixed guaranteed income over a specified time period (between one and five years) and a guaranteed return of capital at the end of the specified term. They offer flexibility as the investor can choose to have the income monthly, annually or all the interest rolled up and paid when the bonds term ends. Like savings accounts, interest on GIBs is taxed at the basic rate of 20%.

Relevant to: First-time investor

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