Investment Bonds – Nurturing your habit of saving

‘A penny saved is a penny earned’. It is certain that all of you are aware of this proverb and might have received this piece of advice, at least once in your life. Money is a medium that facilitates trade. Being a powerful element, it has to be used wisely and saved accordingly. The biggest advantage of saving money is that, it will back you to face the untoward events of your life.

Saving money as a phenomenon has been sustaining since generations. There are many ways to save money. It could be in the form of a bank deposit, investment in property, stock markets and investment bonds, buying gold etc. Though there are different modes of saving, Investment Bonds do stand out.

How does a bond work?

Investment bonds, also known as Saving Certificates, are easy to buy, for it comes is various denominations. So you can make a choice as per your need or ability. Bonds are purchased for a certain period of time called ‘term’. The investment company issues a certificate against the money you invest. In return, an extra amount of money is added to the principal amount as interest. So, on maturity of the term, you get a bigger amount back. You can also choose to cancel the bond before the term expires. All these factors make Investment Bonds, a risk-free and less complicated invest option.

The face value of a bond is known as ‘par value’. The interest amount paid is called ‘coupon’. For instance, for $ 1000 principal amount, 10% a year i.e. $ 100 will be the coupon.

Purchasing Bonds

There are many private and government companies world wide, which issue Investment Bonds. Few examples are: Bajaj Alliance, ICICI in India; HSBC, Bank of Ceylon etc. in Sri Lanka; US savings bond in the United States; National Bonds and Mashreq Millionaire in the UAE etc.

You can also buy bonds from non-banking organisations. In the UAE, the leading global remittance and foreign exchange brand, UAE Exchange offers you Saving Certificates from National Bonds and Mashreq Millionaire, which are amongst the leaders in the country. Its excellent customer service further makes it easier for you. These bonds offer the flexibility to invest in small amounts too. So even those with low income can now afford to invest and take advantage investment bonds.

For more information please visit our nearest Branch Location or log on to UAE Exchange corporate website