Government bonds

Government bonds are seen as a low risk investment option and are appealing to people who want to guarantee their investment and do not require a high rate of return. This view has declined in recent years because of the problem with euro bonds in countries such as Greece, Ireland and Portugal, but bonds from many countries still remain a low risk option.

Government bonds are bonds issued by a government in its own currency. There are a number of different types of government bonds, commonly known as ‘gilts’ or gilt edged securities. These are made up of conventional gilts, double dated conventional gilts, undated gilts and index-linked gilts.

Some types of gilts offer the potential of higher returns or losses than other types, even though they are generally seen as a low risk investment so if you are considering an investment in gilts it pays to research the carefully and check the individual terms and conditions.

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