Tracker bonds These bonds typically lock up a lump sum for a term of about five years. At the end of the term you are usually guaranteed to get back at least what you invested (or a high percentage of what you invested, such as 90%), together with a bonus related to the growth, if any, in one or more stock markets or in the shares of certain large multinationals. If the particular stock market or shares to which the bonus is linked, do not increase in value over the term, there is no bonus payable at maturity and in this case you would get back the guaranteed capital sum only, which would typically be the amount you invested.
Fixed-term deposits These deposit accounts are typically for a set period of time at a fixed rate of interest that would be generally higher than interest rates offered for regular savings accounts. By saving your money in one of these accounts you understand that you cannot access your money during the fixed term. Deposit accounts are low in risk but on the flip side they tend to produce low returns over the longer term.
Investment funds These vary by what the particular fund invests in – whether it’s shares in top multinationals, large commercial properties, fixed interest securities issued by Governments and large companies or deposits. Some funds may invest in just one type of asset, for example, an Equity Fund which only invests in shares in top multinationals. Other funds, referred to as Managed or Mixed Funds, invest in a mix of shares, property and fixed interest Securities.
Long term savings plans these plans are available from a life insurance company. They accumulate a capital sum over the longer term from regular monthly savings. The recommended minimum term for plans like these is five years and your savings are typically invested in the type of investment funds outlined above.