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What are the types of bonds in the United Kingdom?

In the UK, bonds are debt securities issued by governments or corporations to raise funds.

Types of bonds:

• Government bonds are low-risk bonds issued by the UK government. They are characterized by the payment of fixed interest (coupons)
• Corporate bonds are high-risk bonds issued by companies. Such bonds can bring higher incomes

What are the benefits of bonds for investors?

Thanks to bonds, you can receive regular income through interest. In addition, bonds provide diversification of the investment portfolio.

The main task is to choose the most suitable bonds, depending on the goal - to get a high income or the desire to minimize risks.

How do bonds work in the UK?

Bonds are a fairly simple and effective way for the government and companies to borrow money from investors by issuing bonds of a certain denomination and with a certain coupon rate.

From an investor's point of view, bonds are a good way to get fixed regular income. After all, there are 1-10 year bond yield, guaranteed growth bond

What do you need to know about bonds? Basic concepts:

• The coupon rate or coupon is the interest paid to bondholders. For them it is monthly income
• The maturity date is the date when the bond is repaid.
• The bond's nominal value is the amount returned after maturity.

Calculate future income on a 1-year term deposit (example): 

For what term fixed bonds are available in the UK?

In the UK, fixed-term bonds (also known as fixed-rate savings accounts or fixed-rate bonds) are available for various terms, allowing you to lock your money away for a set period in exchange for a guaranteed interest rate. The available terms typically range from short-term to long-term, and each option has its advantages depending on your financial goals.

Common Terms for Fixed Bonds in the UK:

Short-Term Fixed Bonds:

1 Year: These bonds have a fixed interest rate for one year. They offer more flexibility as your money is locked away for a shorter period.

2 Years: A slightly longer commitment with potentially higher interest rates compared to 1-year bonds.

Medium-Term Fixed Bonds:

3 Years: These bonds offer a fixed rate for three years. They often come with higher interest rates than shorter-term bonds.

4 Years: A mid-range option that balances between return and the length of the investment.

Long-Term Fixed Bonds:

5 Years: A popular choice for those looking to maximize returns with a longer commitment.

7 Years: Less common but available for those willing to lock away their money for a longer period for potentially higher interest.

10 Years: Some providers offer 10-year fixed bonds, typically offering the highest interest rates but with the least flexibility.

You can see the similar FAQ at the link:

• Lloyds online banking for business
• Metro business banking
• Opening a business bank account in Lloyds
• What are HSBC BACS payments?
• What does HSBC business insurance cover?

Details of companies offering the financial services:

Aldermore Bank

Head office’s address: Apex Plaza, Forbury Road, Reading, RG1 1AX

Phone: +44 20 7788 6699

Web-site: http://www.aldermore.co.uk/

Swift code: ALDBGB2P

Reference number: 204503

Stock code: 51WB

ABN: 00947662

BSB: ALD

Al Rayan Bank

Head office’s address: PO Box 12461 Birmingham B16 6AQ

Contact center: 0 800 4086 407

Phone: +44 129 889 0137

Web-site: http://www.alrayanbank.co.uk/

Swift code: ARAYGB22

Reference number: 229148

ABN: 04483430

BSB: ARAY

Freetrade

Head office’s address: 10 Devonshire Square, London EC2M 4YP

Web-site: https://freetrade.io/

ICICI Bank UK

Head office’s address: One Thomas More Square London E1W 1YN

Contact center: +44 344-412-4444

Phone: +44 203 478 5319

Web-site: https://www.icicibank.co.uk/

Interactive Investor

Head office’s address: 2nd floor, One Embankment, Neville Street, Leeds, LS1 4DW

Web-site: https://www.ii.co.uk/

Lloyds Bank

Head office’s address: 25 Gresham Street, London EC2V 7HN

Contact center: 0345-300-0000

Web-site: https://www.lloydsbank.com/

Swift code: LBGTGB22

Reference number: 119278

Stock code: LLOY

ABN: 00002065

BSB: LBGT

NS&I

Head office’s address: 16-20 Great Smith Street London, SW1P 3BT

Web-site: https://www.nsandi.com/

Post Office

Head office’s address: 12 Eastcheap, London. EC3M 1AJ

Contact center: +44 345 722 3344

Web-site: http://www.postoffice.co.uk

Santander

Head office’s address: 2 Triton Square, Regent's Place, London, NW1 3AN

Contact center: 0800-389-7000

Web-site: http://www.santander.co.uk/

Swift code: ABBYGB3E

Reference number: 106054

ABN: 02294747

BSB: ABBY

Shawbrook Bank

Head office’s address: Lutea House, Warley Hill Business Park, The Drive, Great Warley, Brentwood, Essex, CM13 3BE

Contact center: 0345-266-6611

Web-site: https://www.shawbrook.co.uk/

Swift code: WWLLGB2B

Reference number: 204574

ABN: 00388466

BSB: WWLL

Tandem Bank

Head office’s address: Viscount Court, Sir Frank Whittle Way, Blackpool, FY4 2FB

Phone: +44 20 3370 0970

Web-site: https://tandem.co.uk/

Swift code: TANMGB2L

Reference number: 204479

Stock code: 608363

ABN: 00955491

BSB: TANM

Tesco Bank

Head office’s address: 2 S Gyle Cres, Edinburgh EH12 9FQ

Contact center: 0800-591-688

Phone: +44 131 203 5000

Web-site: http://www.tescobank.com

Swift code: TPFGGB2L

Reference number: 186022

Stock code: TSCO

ABN: SC173199

BSB: TPFG