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What is the difference between Fixed Income and Interest Rate products? I think they are not exactly the same?

April 26, 2017Business difference Finance fixed income Interest rate products think

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What is the difference between Fixed Income and Interest Rate products? I think they are not exactly the same?

1 Answer

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10 Posted

Fixed or Guaranteed Income products pay a regular fixed sum regardless of the underlying performance of the investment vehicle. This could reduce the value of the capital if the interest rate earned is lower than the value of the income being paid. An Interest Paying product (sometimes a Guaranteed Capital Product) will pay a variable income dependent on the interest earned. The interest is therefore variable, but the capital should remain constant.