It is possible to buy bonds direct. Gilts can be bought through a government department called the UK Debt Management Office (DMO) or 'second-hand' through a stockbroker. Corporate bonds can also be purchased through a stockbroker. The simplest way is by investing in a gilt or corporate bond fund whose manager will select the best bonds to invest in. Stick to household-name funds and managers, with good track records.

The price paid for a bond can vary. A £100 bond offering a return of 6.5%, with interest rates currently at 3%, it would be attractive to investors and the market price paid for each bond would go up, to, say, £108.50.

How long do you intend to keep the money invested?

- Very short-term: Try money market funds to avoid having to sell your shares during periods of declining share price, or very short-term bond funds that seek minimal price fluctuation.

- Shorter-term time horizon (up to one year): Consider a short-term bond fund. Likely higher yields and total return than an investment in money market funds, but the value will fluctuate each day based on the current market.

- Longer-term: Bigger rewards with an intermediate- or longer- term bond fund or one with exposure to higher yielding, lower-quality bonds.

Some products on this site are only open to UK residents. Others are only available to 'First-world' countries; if you live in Nepal, you're out. I'm basically a one man band. If you contact me, I may not reply; if there's sopmething in it for me, I will.

The best bond funds is easy to find. Just go to one of those sites offering to compare 100, 200, or 2008 different ones. The trick is finding the best deal for you, given your circumstances.

Ideally, what you see is what you should get. Regardless, any broker providing bond fund services should have a simple list of fees, The lower, the better, unless it's some fly-by-night two-year-old upstart LLC working out of a back room in Bangkok.

Never forget the final check. Make sure your broker understands your instructions. Put them in writing. If you find a problem, speak up. Otherwise, the deal will be done.

Average Maturity: A bond fund maintains a currency-weighted average maturity, which is the average of all the current maturities of the individual bonds in the fund. The longer the average maturity, the more sensitive the fund will be to changes in interest rates.

How can YOU get the BEST deals on bond funds?

Answer:

- Do some research.

- Get quotes from four brokers.

+ Don't just pick a broker out of a newspaper. Ask friends. Use the internet! This could be a major purchase. It makes sense to spend a bit of time snooping around.

Another way to winnow out the best broker is to contact them via email, and see what they send you back. Call them on the 'phone as well. This, coupled with your survey of their site, will give a good clue as to whether they're a 'sound', active brokerage, or moribund i.e. on the way out of business. ALWAYS FOLLOW YOUR GUT REACTION. The mind has doubts, the heart has its desires, but the guts don't lie!