Capital Bonds or Corporate Bonds, as they are sometimes known, have become an ever more popular way of investing. Interest returns on these type of investments are typically much higher than those offered by deposit accounts in High Street Banks.
Capital Bonds they are an alternative way to investing suitable for people who do not like the volatility of the stock market and want more predictable returns. Capital Bonds do not give ownership rights to investors unless such bonds give the bond holder an option to convert. These bonds have defined time periods in which income can be expected. Typically Capital Bonds are safer than shares in a company.
Purchasing of Capital Bonds can be compared to giving a loan to a company. Based on the type of Capital Bond that is purchased, investors would get periodic interest payments or may even get a lump sum greater than purchase price at maturity. Corporate Bonds have a defined redemption term. The redemption period can vary, but typically corporate bonds offer a maturity date of between one and five years.