High yield bonds and other fixed income investments have grown in popularity with self-directed investors. The accessibility of information online about investment options has meant investors are becoming increasingly savvy and making direct investment decisions themselves.

Bonds and other similar debt instruments are a common choice for self-directed investors seeking yield. They represent a way to deploy capital in a meaningful way – to fund a corporation’s business activities – whilst giving the investor the ability to benefit from interest rates which are typically higher than those offered by traditional bank deposits, term deposits and other banking products. It is not uncommon for bond rates to be at least 1-6% higher than interest rates offered by banking products.

Like all investments, there are risks to consider with investing in bonds and other high yield investment products outside the banks. These include liquidity risk, default risk, valuation risk and the risk of loss of capital, however good companies can manage these risks carefully to deliver a sound, capital-stable opportunity.