Capital Investment bonds are designed to give capital growth and/or income over a medium to long term period with access to your money by via regular or one off withdrawals. These are mostly set up for investment over at least a five year period. You are likely to be charged a penalty if you choose to cash in your investment early.
People of any age can hold a bond and there is no need for the insurance company to check your health status. Bonds can either be opened onshore (within the UK) or offshore (usually in the Isle of Man or the Channel Islands) to benefit from tax concessions. Your personal tax situation will dictate which option is right for you.
There are no maximum limits to invest, but there is often a high barrier to entry, usually in the region of £10,000.
i. The value of investments and the income they produce can fall as well as rise. You may get back less than you invested.
ii. Tax treatment varies according to individual circumstances and is subject to change.
Depending on the terms of your policy you may be able to make additional payments to the bond at any time, and also make one-off withdrawals.
A stock market upturn can make a profit for an investor in bonds and capital can be protected at a cost if the stock market falls. There are management charges associated with any capital investment bond, which we will help you to understand.