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Maybe you’re new to investing. Maybe you understand the ‘ins and outs’ of how to invest. Either way, having a team of experts who support you gives you a significant advantage. We have a genuine desire to see you (and your family) succeed. Partner with us. Let’s invest in the future, together.

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Tax Shelter

How would you like 5 years of tax-free returns?

Curious? Here’s how it works: invest up to J$1 million each calendar year and, once the funds remain untouched for a minimum of five years, all the interest is tax-free.
 

Unparalleled perks

Tax-Free Returns and Accessing Quarterly Interest Can Go Hand-In-Hand

• Tax-free interest, if no withdrawals are made on your investment for 5 years
• You can add to your account anytime
• 75% of the interest earned is available for withdrawal, each calendar quarter
• Choose whether to make lump sum or incremental investments, it’s up to you
• Since each investment will have its own 5-year investment period, if you choose to invest an amount every month of the year, you will have maturities every month over the course of the year (5 years from now).
• No management fee
   

Best for

• Long-term goals like retirement planning and investing for your children’s education

Qualifications

• Minimum opening
  • J$25,000

Find out how to get started

 **Tax Shelter is offered by JMMB  Investments

Bonds

What is a bond?

Have you ever borrowed or lent money before? You’re not alone. In fact, companies and governments borrow money in the same way you do. Except they’re borrowing it from you. And you get interest on it.

A bond is basically a loan (in other words, an I.O.U.) where you are the lender. The issuer is the organization or government looking for the loan. JMMB is in the middle, acting as a broker, to transact those bonds between you and the organization.

Why should I take out a bond?

When you take out a bond, you’re signing a contract with a company with the expectation that:

1.    They will pay you back once there is no default.

2.    For most bonds you will be paid (interest) for this loan throughout the loan period. It’s a great way to invest your money. Just make sure you’re investing in an accredited source, as some bonds are more reliable than others. And while usually, it’s best to wait until the bond matures to sell it, you should always keep your eyes open to sell early if you can find a profitable avenue.

Terms to know

• Coupon rate: the rate of interest (which is paid on a periodic basis)
• Face value: the total amount borrowed (usually in some denomination of $1,000.00)
• Maturity date: the date on which the issuer is scheduled to repay the amount borrowed, which could range from 1 day to several years
• Issuer (borrower): The person responsible for paying the coupon rate until the date agreed upon
   

Real-Life Example

Let’s say you buy a bond with a face value of $1,000.00, for $1,000 a coupon of 10%, and a maturity of five years, with biannual interest payments. Note that the price you are paying would be the same as the amount you will get back on maturity. In the financial world, we would say it is being purchased at par.

In this case, you will receive a total of $100.00 ($1,000.00*10%) of interest per year for the next 5 years. However, in most instances the coupon/interest is paid out every 6 months. So over the period of 5 years, you would receive 10 payments of $50 or $500 in total over the five years. Additionally, however when the bond matures, providing that there is not default, you will also receive the $1000 the issuer promised to repay.

When Buying at a Discount

However, sometimes a bond which will repay $1000 upon maturity will be priced such that you get a discount. Let’s say you pay $900 for a face value of $1,000. It means that provided there is no default you should have a profit/capital gain of $100! Additionally, since the coupon rate of 10% is calculated on the face value of $1000 you will still get coupon payments of $100 per year ($1,000 * 10%) but in most cases it will come as $50 semiannually. Again you would end up $500 over the 5 year life of the bond, plus the $100 profit making your total earnings $600. Of course, if there is no default you will receive your $1,000 at the end.

When Buying at a Premium

However, sometimes a bond which will repay $1000 upon maturity will be priced such that you have to pay more than the $1000 that you should receive on maturity. Let’s say you pay $1,100 for a face value of $1,000. It means that provided there is no default you should have a loss/capital loss of $100!

However, it could be still quite advantageous to purchase this bond. Again the coupon rate of 10% is calculated on the face value of $1000 you will still get coupon payments of $100 per year ($1,000 * 10%) but in most cases it will come as $50 semiannually. If you hold the bond to maturity, you would end up $500 over the 5 year life of the bond, minus the $100 premium you paid. Your total earnings would therefore be $400. Again, if there is no default you will receive your $1,000 at the end.

Based on this most you may want to buy the bond at a discount, however sometimes that just will not allow but you can still get great value buying it at par, or at a premium. Ensure you seek advice from one of our financial advisors so you ensure you are making the best choice for you.

The details

Interest/Coupons: Usually paid every 6 months, but may be monthly, quarterly, or annually. These rates may be fixed or variable. A variable rate bond is usually tied to market rates through an index such as the rate on Treasury Bills.

The risk: When you invest in a bond, consult the ratings agencies (eg. Standard and Poor’s and Moody’s). These provide ratings for all bonds so investors can understand the level of risk inherent when taking a bond. While bonds are a generally a safe investment, this is not always the case.

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