Gilts
posted on 06-06-2019
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.