Most investment plans pay either annually or bi-annually. Stock gives you the earnings quarterly, but there is a lot of risk when investing in the stock market. Therefore, this bond has been introduced to help you build a portfolio which can pay dividends every month. This investment product can ensure you have a reliable income after retirement to help pay your living expenses.
When you invest your lump sum in a monthly investment plan, then the bond issuer gives you the coupon payment (interest amount) monthly on the investment, however, the interest is calculated daily.
There are several benefits over other types of investment which are listed below, if you invest your savings in a Monthly Income Bond:
Lucrative & Less Risky:
This type of bond is labeled with good monthly returns and is also less prone to risk. These are the reasons that make this product a lucrative deal for investors. Your capital amount is safe and the interest amount will transfer into your account every month. However, the amount of interest may vary with inflation, but won’t stop the monthly payments.
Investors can build a good portfolio investing their money in this type of bond. The interest amount is paid tax-free, which gives them the freedom to reinvest the returns and build up good savings. This is the reason why the majority of people in the UK rely on this type of bond to secure their future financially.
Income for Retirement:
This is the best investment plan for retirees or people who are near to retirement. Fulfilling basic expenses becomes the biggest problem for retirees, when there is no source of income available, and pension income is not enough to make ends meet. It becomes necessary to look for an investment plan which can provide a monthly income. Hence, these types of income bonds are best to solve financial difficulty.
Free to Invest with your Capability:
It doesn’t matter how much savings you have – you can invest as per your circumstances in this bond product, and earn regularly. You can also strengthen your portfolio by investing in several income bonds at the same time.
If you are willing to invest your lump sum in a volatile bond product, then choose this product. But, if you can’t take the risk of variable interest rates, then you can also opt for the fixed monthly income bond. This is the best alternative solution for retirees to earn a fixed amount of return.