Please remember that the value of an investment and the income from it can go down as well as up and you may get back less than you invested.
We don't provide advice so if you are in any doubt about making your own investment decisions we recommend you seek advice from a suitably qualified financial adviser.
Issuing bonds and gilts is a way for companies or governments to raise capital. By investing in a bond or gilt, you are lending money to a company or government for a fixed period in return for a fixed rate of interest, although this can vary depending on the bond or gilt. They carry a nominal value that will be paid back to the holder on a stated date (the Redemption Date).
Traded on the open market, bond and gilt prices are constantly changing. A company or government’s stability can affect the price so, while safer than equities, bonds and gilts carry an element of risk and you may lose some (or all) of your initial investment.
Bonds and gilts are not covered by the Financial Services Compensation Scheme (FSCS) and repayment of bonds is not guaranteed if a company fails. Economic factors can affect the market price and if interest rates rise, the capital value of the asset will fall – this is known as capital erosion.
Please note: You can’t trade bonds and gilts within the Halifax ShareBuilder.