Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Gilts

What it is:

Gilts are bonds issued by the British government. India's government bonds are also called gilts.

How it works (Example):

Gilts get their nickname from the gilded edges that the security's certificates used to have.

In Britain, gilts are issued in 100-pound units and represent a loan to the government. The bonds promise income over a fixed term, and the government repays the principal at maturity. Investors can buy gilts from the British government by going to the government's Debt Management Office or via a brokerage service. Investors can also buy gilts at the post office.

Why it Matters:

Gilts are the British equivalent of U.S. Treasury securities. Like Treasurys, some are indexed to inflation. Large financial institutions are the largest purchasers.