Virgin Bonds and Gilts ISAs - Earn a regular income with lower risk to your capital

Why choose this ISA?

If you are looking for a better return than a deposit account but are not ready to invest in shares this may suit you.

Here are 3 reasons why it might be good for you:

• A regular income with lower risk to your capital
• We put the security of your capital first
• You can use our fund for growth and income

Why choose this ISA?

A regular income with lower risk to your capital

Whether you’re looking to grow your savings or get an income from them, if you’re not comfortable investing in shares, our Bond and Gilt Fund may offer the perfect solution. It offers the potential for a higher return than you'd normally get from a deposit account, providing you're happy to accept an increased level of risk.

Bonds are considered a half way house between shares and a deposit account in terms of risk and return. They traditionally give much better returns than a bank or building society deposit account, and are less volatile than shares, as the graph below illustrates.

Source: Workstation, £3,000 lump sum, buying to selling unit prices, basic rate tax with income reinvested, 31.03.96 to 30.09.11. ‘Stock market shares’ is the FTSE All-Share Index. ‘Bonds’ is the Citi Eurosterling Bonds Index (AA- or better) which shows the performance of bonds with a Standard and Poor’s security rating of AA- and above (this rating means the issuer has a very strong capacity to meet financial commitments). ‘High street savings account’ is the UK Savings rate 2500+, based on the average rate paid by the top 20 building societies.

Please remember, past performance isn’t a guide to the future, and with all stock market investments the value of your savings and the income you get from them can fall as well as rise, so you may not get back the amount you invested.

Why choose this ISA?

We put the security of your capital first

One of the basic rules of investment is that risk and return go hand in hand. At Virgin Money we recognise that to customers investing in a fixed-interest fund, the security of your capital is as important as a steady return on your money.

Our investment approach aims to strike the right balance, by only investing your cash in top-rated corporate bonds with highly creditworthy and well-known companies from Europe and the UK, plus a range of government gilts, which are at the safest end of the spectrum for fixed interest investments.

Some fund managers may sail close to the wind by investing in higher-risk bonds (nicknamed ‘junk bonds’) which pay inflated levels of interest to make them seem more attractive to investors. Don’t be fooled. Funds offering apparently exceptional returns will by definition be taking more chances with your money. If the companies they invest in go bust, their bonds could be worthless.

Why choose this ISA?

You can use our fund for growth or income

Because bonds and gilts pay out regular interest, you can choose to have this paid out to you as a regular six monthly income, or you can have it reinvested to grow your savings. You just tick the box to let us know when you apply. And you can change your mind and switch whenever you like.