High income bonds

High income bonds offer investors a monthly income at a competitive variable interest rate and are particularly attractive for those wanting to earn a higher level of income than they could from traditional savings accounts.

They are designed with incentives in place to entice people to invest as much as possible. Basically, the more you invest in income bonds, the higher the rate of interest and the higher the income you will receive each month. However, it is important to be aware that with higher returns and higher income paid out the riskier the investment is likely to be.

The downside of a high income bond is that there is no guarantee on the money you invest. Some income bonds will pay out a fixed income to policyholders regardless of the bond's performance, others are capital-protected which means that should the fund deplete, then so too will the income that is paid out to investors.

It is therefore very important if you are considering investing in a high income bond to check the level of protection that comes with it.

	Santander launches new range of high interest savings bonds Santander has launched a new range of fixed rate savings bonds that pay up to 3.55 per cent gross AER.
	Berlusconi faces D-Day as rate on Italian bonds reaches new high The Italian Prime Minister, Silvio Berlusconi faces a vote that could end his political career today as yields on 10-year Italian bonds reach a new record high.
	Barclays launches 6% regular income bond Barclays Wealth has introduced a new bond offering investors a monthly income of six per cent pa equivalent over a six year term.
	Halifax unveils Income Generator 2 The Halifax has launched its Income Generator 2 investment product that offers a potential return of 7.2 per cent annually for five years dependent on the performance of the FTSE 100.
	Tax Commission calls for 30% flat tax rate on income and capital A new report by the 2020 Tax Commission says that a flat rate of 30 per cent tax on both income and capital will raise GDP over 15 years and end the UK's "punitive" tax system.