Guaranteed Income Bond (GIB)

AAA

DEFINITION of 'Guaranteed Income Bond (GIB)'

A guaranteed income bond (GIB) is an investment tool that provides income in the form of interest over a specified time period, usually between 6 months and 10 years. These bonds are issued by life insurance companies in the United Kingdom and are generally considered a low-risk investment. You can typically choose how frequently you want the payments, such as monthly, quarterly or yearly.

INVESTOPEDIA EXPLAINS 'Guaranteed Income Bond (GIB)'

Guaranteed income bonds provide investors with fixed periodic interest payments so the investor knows what to expect in terms of return on their investment. The initial capital investment is guaranteed to be safe under most circumstances and is returned at the end of the investment period.

RELATED TERMS
  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Maintenance Bond

    A type of surety bond purchased by a contractor that protects ...
  3. Stock

    A type of security that signifies ownership in a corporation ...
  4. Capital Gains Treatment

    The specific taxes assessed on investment capital gains as determined ...
  5. Equity Derivative

    A derivative instrument with underlying assets based on equity ...
  6. Investment

    An asset or item that is purchased with the hope that it will ...
RELATED FAQS
  1. Why did Warren Buffett invest heavily in Coca-Cola (KO) in the late 1980s?

    Warren Buffett found Coca-Cola an attractive investment because it had a moat and was attractively valued. Buffett began ... Read Full Answer >>
  2. What does it mean when I get a Fed margin call?

    Understanding fed margin calls and how they affect your trading account is part of investing basics. A margin account allows ... Read Full Answer >>
  3. How does arbitrage affect the price of exchange traded funds (ETFs)?

    Arbitrage may be used to bring the market value of an exchange-traded fund (ETF) back into line with the net asset value ... Read Full Answer >>
  4. How do I use the principles of convexity to compare bonds?

    Convexity, along with another principle known as duration, is an important consideration when assessing bond risk. All else ... Read Full Answer >>
  5. How are new exchange traded funds (ETFs) created?

    The creation and structure of exchange-traded funds (ETFs) are similar to that of mutual funds. An ETF serves as a portfolio ... Read Full Answer >>
  6. What does it mean to roll a derivative contract?

    A derivative is a financial instrument in which the price of the derivative is dependent on an underlying asset. A derivative ... Read Full Answer >>
Related Articles
  1. Bonds & Fixed Income

    Bond Call Features: Don't Get Caught Off Guard

    Learn why early redemption occurs and how to avoid potential losses.
  2. Bonds & Fixed Income

    Basics Of Federal Bond Issues

    Treasuries are considered the safest investments, but they should still be analyzed when issued.
  3. Investing

    The Advantages Of Bonds

    Bonds contribute an element of stability to almost any portfolio and offer a safe and conservative investment.
  4. Bonds & Fixed Income

    Savings Bonds For Income And Safety

    Bonds offer undeniable benefits to investors, including safety and tax advantages.
  5. Mutual Funds & ETFs

    Bond ETFs: A Viable Alternative

    Discover the advantages of a security that tracks bond index funds, but trades like a stock.
  6. Mutual Funds & ETFs

    The Bond Market: A Look Back

    Find out how fixed-income investments evolved in the past century and what it means today.
  7. Investing

    eBay Vs. Amazon Business Model

    For sellers looking to unload grandma’s things, the decision to go online is easy, but, they still must choose which site to list with: eBay or Amazon.
  8. Trading Strategies

    When To Follow The Crowd And When To Lose It

    Our profits ultimately depend on the misfortune of other market players.
  9. Active Trading Fundamentals

    The Shiny Object Syndrome that Kills Trader Productivity

    People get distracted and, in their excitement, they end up trying to learn everything rather than focusing on the subject they had originally set out to learn.
  10. Investing

    Risks & Rewards Of Investing In Bitcoin

    Since Bitcoin is not a company and therefore does not have a publicly traded stock, how can you invest in it?

You May Also Like

Hot Definitions
  1. Stop-Loss Order

    An order placed with a broker to sell a security when it reaches a certain price. A stop-loss order is designed to limit ...
  2. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  3. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  4. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  5. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  6. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
Trading Center