When you buy a corporate or government bond you are, in effect, lending a company or government money. In return you receive interest and the issuer promises to pay back the loan on a specified date.
This means that in terms of risk, bonds generally sit between cash and shares. That said, investing in bonds does carry its own risks and you could get back less than you invest.
Why invest with Hargreaves Lansdown?
- Low cost
Buy and sell corporate bonds and gilts from just £20 per deal, and never pay more than £50 per deal.
- Wide investment choice
You're free to make your own investment decisions and choose from a wide range of bonds including government-backed gilts, investment grade corporate bonds and even more speculative, corporate bonds and PIBS.
Most corporate bonds and gilts can be held in the SIPP, ISA or Fund and Share Account, allowing you to shelter your investments from further tax. However, some restrictions may apply.
Remember, tax rules can change and the reliefs depend on your personal circumstances.