investment bonds

Austock is a life insurance company but its life insurance products are a little different. The $100 million company sells ‘insurance bonds’ or ‘investment bonds’. Usually, these bonds are used by clients of good financial advisers or by people who are willing to put in some effort to minimise their tax.
Basically, you buy the investment bond, which itself can invest in other things like managed funds. It is taxed at less than 30%, so it is popular for high-income earners but also grandparents and parents investing for their children. After the first year, you can choose to add more money to your bond.
But here is the best part: after 10 years, you can retrieve the proceeds and your capital, tax-free. There is one important condition: you do not contribute more than 125% of the prior year’s balance to the bond. For example, if there is $100 in the bond this year, you cannot add more than $125 next year. If you do, you will reset the 10-year countdown.
Ultimately,  it is the second-best place for high-income earners to park their cash, behind super.  Austock is well placed to benefit from the trend towards superannuation alternatives.