Government Guaranteed 10 Year Treasury Bonds

Insurance bonds are investment bonds which are offered by life insurance companies and provide single premium life insurance policy. The investors who hold these insurance bonds for more than 10 years without making any type of withdrawals are offered to receive their earnings free from any type of taxes. Important features of insurance bonds include tax deferred status, access to investments like guaranteed or protected profit funds and reducing of inheritance tax liability on an estate. These bonds offer a minimum guaranteed income for life of the plan holder and offer long term savings for high tax payers. The plan holder can potentially save tax on the earnings if the marginal rate of tax is higher than 30 percent levied on the insurance bonds. These bonds offer long term saving benefits for children as the parents can invest on behalf of the children and nominate them as future beneficiaries. Since minors are subjected to low rates of tax, this might help them in paying fewer rates of taxes while holding large investments in their own name.

Maintaining insurance bonds for 10 years would mean addition of original amount plus the net accumulated amount on tax earnings that can be withdrawn free from personal income tax and capital gains tax. The most important benefit of insurance bond is the rule of 125 percent increment. This is considered to be one of the most beneficial features of this bond which allows increment of the investments over 10 subsequent years and not paying personal income tax and capital gain tax.

Treasury bonds are common form of investments done for raising money from treasury yields and are generally sold by treasury department for paying off the debts. Treasury yields rates go down when there is a rise in the demand of treasury products and therefore are considered to be safer investment options. Treasury yields and Treasury bond values both go in the opposite direction and the yield would be on the higher side if the time frame on the treasury product will be longer. 10 year treasury bonds are debt obligations issued by the treasury department that has a term of more than one year and not more than 10 years. These types of bonds bear a stated rate of interest and the plan holder receives semi-annual interest payments.

In Australia, people take keen interest in investing in state treasury bonds like NSW treasury bonds (New South Wales treasury bonds). The yield curve is the relation between interest rate and maturity of the debt in a given currency for a given borrowed amount. The different types of yield curves include normal yield curve, steep yield curve, flat yield curve and inverted yield curve. The shape of yield curve indicated the interest of the investor expectations of future inflation and cash rates. If the bond investors require higher rate of interest for holding bonds for longer maturity, the yield curve usually slopes upwards. For the year 2005, the Australian bond yield curve has been almost close to flat or negatively sloped.