Dear Ask the Expert: What Are the Various Investment Options Available to the Typical Barbadian?
There are different kinds of investments available in Barbados for the typical Barbadian. Some of these include stocks, mutual funds, treasury bills, government bonds (treasury notes/debentures), savings bonds, BOSS+ bonds, life insurance policies and registered retirement savings plan. There are available from financial institutions (banks, credit unions, insurance companies, investment managers) in Barbados. Your investment choice should be based on your individual goals. You should consult with a professional financial advisor to help you make the best investment decisions.
Let’s take a brief look at some available investment options.
Investment Option
Description
BOSS+ Bonds
A five-year security issued at face value
Interest rate of 4.5%
Minimum investment $500
Tax free
Corporate Bonds
A debt security issued by a corporation/company (e.g. Barbados Port Inc., Williams Industries Bond)
Varies in maturity and interest rate
Varies in investment amount
Income subject to withholding taxes (currently 15.0%)
Government Savings Bonds
A five-year security issued at a discount (pay less than the nominal value but receive full value on maturity)
Minimum investment $50 to a maximum of $100,000
Tax free
Life Insurance Policies
(Examples - Whole Life Insurance, Universal Life Insurance, Endowment)
Whole Life provides coverage for the insured’s entire lifetime. Premiums payments contribute to a cash value account which grows overtime and can be borrowed against or invested.
Universal Life offers more flexibility the whole life polices. Premiums payments and death benefits can be adjusted while accumulating cash value.
Endowment pays a lump sum on maturity or upon the insured person’s death.
Mutual Funds
Investment that pools money from different investors. The pooled money is then invested in stocks, bonds and other securities. Mutal Fund is divided into shares. Each investor in the fund buys shares that match their investment amount.
Varies in investment amount with some funds starting at $500
Income subject to withholding taxes (currently 15.0%)
Registered Retirement Savings Plan (RRSP)
Investment account specifically used to save for retirement
Varies in investment amount
Lump sum payments subject to taxes (currently 25%)
Stocks/Shares
A stock is a unit of ownership in a company. Owning a share of stock means that you are a shareholder, and you own part of the company.
The company pays shareholders a portion of its profits through dividends
Dividend income is subject to taxes (currently 15.0%)
Treasury Bills
Short-term debt securities typically issued at a discount for 91 days (3 months) or 182 days (6 months)
Interest rates vary based on market conditions.
Minimum investment $1,000
Income subject to withholding taxes (currently 15.0%)
Treasury Debentures
Fixed income instrument with a maturity over ten years
Interest rate determined when issued
Minimum investment $1,000
Income subject to withholding taxes (currently 15.0%)
Treasury Notes
Fixed income instrument issued for a period ranging from one to ten years
Interest rate determined when issued
Minimum investment $1,000
Income subject to withholding taxes (currently 15.0%)
Lydia R. McCollin, FCCA, FCA, is the Managing Director of LRM Consulting Services Inc.
Do you have a question about saving, budgeting, investing, borrowing, planning for retirement, or anything related to personal finance? Pose it here. You can also visit our MoneySmart hub for more articles, videos, and tips on how to secure your finances.
