Are you looking for an investment that is easy to set up and manage, has low fees, and is tax effective?
Investment bonds are often misunderstood, but are a very effective way to save for the future. Whether it’s saving to buy a home or working towards paying off a mortgage, a trip of a lifetime, putting away some extra money for kids or retirement; 10Invest helps you on your way.
Not sure of what an investment bond is, or how it works? Then let us help break it down.
What is an investment bond?
An investment bond is a savings product, but unlike traditional savings or investment products, investment bonds have unique tax effective features.
Investment bonds are all about establishing long-term regular savings habits. If you continue to save and hit the 10-year mark, you can withdraw with no personal income tax to pay. And you’re not locked in, you can easily access your money at any time (unlike Super) and still benefit from a 30% tax offset.
An investment bond also has similar features to managed funds or superannuation and should not be confused with Government or Corporate bonds which are significantly different.
Like a managed fund, the money you invest is pooled with other investors. Each investor selects where their money is invested, from several different investment options with Vanguard, a global mutual organisation.
The high-quality investment options offered generally include cash, shares, fixed interest, and property, with a range of risk levels that help determine how conservative or aggressive you want to be with your investment.
Another feature of an investment bond includes the ability to nominate a beneficiary for the investment, just like you would with your superannuation. This means that should you pass away, your funds will go to your nominated loved one, trust or even charity; the advantage of an investment bond is that you can nominate any person/charity/trust, whilst Super generally restricts beneficiaries to dependents only.
By getting started and saving often, you can let the power of compound interest, coupled with the tax effectiveness, help to accelerate your savings. Compound interest means that interest earns interest and the long-term funds can make a real difference to savings.
It’s never been easier to start an investment bond
Australian Unity’s 10Invest is a simple, low-cost and tax effective investment to help you save for the future.
Adnan Glinac, EGM Life & Super - Australian Unity, says the tax effectiveness of investment bonds make them an ideal product for investors who want a smart and set-and-forget saving solution.
“Understanding that there’s no such thing as a get rich quick strategy – investment bonds are a sensible and tax-effective way to support people looking to put money away for life’s big milestones.
“We have designed 10Invest to ease the pressure on families trying to save for significant life expenses such as a child’s house deposit, a wedding, a renovation, that once in a lifetime trip or complementing an existing superannuation and retirement plan.”
How an investment bond works
Essentially, you deposit money into an investment bond. Then we (Australian Unity) invest your money in the investment options you’ve selected.
During that time, we pay the tax on your investment earnings to the Australian Tax Office at the 30% Life Insurance tax rate. This means you don’t need to include it on your personal tax return while you’re invested!
Once you hold your investment bond for 10 years, you can withdraw your money with no personal income tax to pay – or withdraw at any time and benefit from a 30% tax offset.
For more information on the advantages of saving with 10Invest, please visit australianunity.com.au/wealth
© 2019 10Invest (‘Lifeplan Investment Bond’) is issued by Lifeplan Australia Friendly Society Limited ABN 78 087 649 492 AFS License number 237989, a wholly owned subsidiary of Australian Unity Limited ABN 23 087 648 888.
Information provided here is indicative only. In any decision, you should only rely upon the content found in the relevant disclosure document, which you must read, since an investment can only be processed from an application form attached to it. Any decisions relating to a financial investment should only be based upon a consideration of your overall objectives, current and anticipated situation or needs, and should not be influenced by historical data such as past performance.
Any tax information provided here and in any disclosure documents is general in nature and is only intended to provide a guide on how tax may affect investors. Tax laws may change in the future and may affect an investor’s tax position and the tax information described in any disclosure documents issued. Investors should seek independent tax advice relevant to their particular circumstances.