About U.K. Government Bonds
U.K. government bonds are the debt-securities issued by the Bank of England. The certificates have a gilded edge, giving the bonds the common nickname of "gilts." U.K. government bonds are listed on the London Stock Exchange and are one of the most trusted investments in the world, with over two-thirds being held by pension funds and insurance companies.
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History
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Founded in 1694, the Bank of England is the central bank of the U.K. and carries the responsibility of keeping the nation's economy stable while setting monetary policies. The bank first issued bonds to fund the war with France during the 17th century, and has continued to issue bonds for over 300 years.
Features
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U.K. bonds are guaranteed by the government, which makes them the most stable investment available. There is a variety of types to choose from, with some offering a regular fixed income and others fixed to the market index rate and an annual pay out.
Size
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Check with a global securities broker to find the current pricing and minimum purchases on U.K. bonds, as the size will fluctuate with the market and type of bond you wish to purchase. Some types, such as Premium Bonds, are limited to a maximum holding of 33,000 sterling pounds per individual.
Time Frame
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Conventional bonds give the bearer a monthly dividend, usually for an entire year (depending on the year the bond was issued). Other types of bonds pay interest as well as a dividend depending on the current market rate. Unlike U.S. bonds which hold a set value, bonds in the U.K. are more like American municipal funds in their method and time frame of income received.
Warning
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Not all persons are legally able to invest in U.K. government bonds. Be sure there are no restrictions on your right to collect interest and always verify the legitimacy of any global securities broker you choose to invest with. You should also verify that your holdings in U.K. government bonds are exempt from U.K. taxes.
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