This article is an introduction to investment bonds, how they work, the advantages of investing in them as an alternative to super and the types of investors they best suit.
Popular in the days before compulsory superannuation, investment bonds fell out of favour as super became the preferred tax-advantaged environment. With tighter restrictions on superannuation contribution limits, bonds might be worth a fresh look.
Investment bonds are a type of insurance policy primarily used as an investment vehicle. Available from a range of providers, investors can choose from a suite of underlying investments in much the same way as regular managed funds. Investment bonds shouldn’t be confused with interest-paying government or corporate bonds. They are a unique type of asset offering a range of advantages.
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