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What to invest in: ISA/Fixed rate bonds?

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Written on: 20.11.2009 [21:45]
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Posts: 1
With the way the economy is at the moment I think it is very difficult to know where to invest money. I want to be wise & informed before I make a decision but everything I read just gets deeper and deeper in to investment until I get to the point where I have no idea what they are talking about. I know a fair bit about ISA & Fixed rate bonds and think that I have a general view of the market and that they would be my best options, so now it’s the showdown. Which one should I go for, an ISA or a fixed rate bond?
Written on: 22.11.2009 [23:25]
Posts: 2
I think that it is wise in this current economic climate that people stick to ISAs and bonds for their first investment. There is no point jumping in at the deep end and they can be a good way to invest money. Many people get confused between the two though as they do have a lot of similarities, I imagine this is why people such as yourself find it hard to choose between them as they have a lot of common features. I personally find that fixed bonds at the moment though are not the greatest option especially when you think back to what they were. People who opened fixed rate bonds last year are laughing now as they have secured a 5% interest rate when the base rate is now down to a measly 0.5%. But then it doesn’t seem too wise to lock in to a fixed term, fixed rate bond when the climate may change and thus you might lose out. Most people then think that they can simply transfer their money in to a higher account, but they often don’t realize that you lose the interest accumulated until that point if you withdraw your money before the end of the term so it probably doesn’t do you any good. However saying that ISA offer very low rates and you will probably be more tempted to go for a bond, if you can be sure to be financially secure for the term and can afford the amount then why not, just be wise to look at the rate trends to not get sucked in to a fixed term when they might change.

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  • Written on: 25.11.2009 [07:53]
    Posts: 3
    An ISA is always the first place to go. I am guessing from your question that you do not have much experience in stocks and so you should stick to something safe and simple. But searching is always necessary, look online and in branch for different rates. Don’t jump on the first “bargain” you see, you need to be sure that you have checked all the options available.

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