Conventional gilts are where the government agrees to pay the holder a fixed cash payment (a 'coupon') every six months until the maturity date, at which point the initial sum invested (the 'principal') is returned. The UK Treasury issues gilts with maturity dates that are five, 10 or 30 years into the future.

FOLLOW YOUR GUT INSTINCT. We are all archangels of the Lord. We are smarter than we think we are. Put aside your egotism (pride), and ask youself, in your heart of hearts "Is this right?". Do that, and you'll make a lot fewer mistakes buying savings bonds.

Try to make sure you are comparing like with like, when shopping for anything on the internet. Before completion, review your purchase. Are you getting the best deal from a reliable vendor? Or are you getting a cheapo deal from a fly-by-night carpet-bagger, who, when you need them most, will not return your calls?

Avoid savings bonds web sites where: The business address is a P.O. Box; The site is on a free web host; The site has not been updated recently e.g. the Copyright reads 2004; They've only been running for a few years; The site is badly translated into English.

It makes me chuckle when I hear visitors sing the 'cheap-cheap' song. You see the trend in international pricing is down, down, down; eventually, any savings bonds-related good that can be reproduced by someone else will cost the same price everywhere. But you won't get the same value, especially if that good is a service.

Consider why you are buying. People buy savings bonds for different reasons. They may be looking to buy for a family member, to make additional income, or to round out a portfolio. Before purchasing any type of savings bonds, know your motivations. This can help you find the right product.

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

The internet has made obtaining savings bonds quotes a lot less time consuming than having to call around and wait for salespeople to turn up. You can now obtain instant online pricing regarding savings bonds services and compare hundreds of brokers. You can surf for prices 24 hours a day and try out as many different brokers as you like without having a pushy salesperson on the 'phone. Using online quotation services often result in much lower quotes as the broker overheads are reduced. All quotations should be free and without any obligation to buy.

Why hold bonds? The principal reasons for holding bonds are to reduce the overall risk of a portfolio and to produce a decent level of income.

Interest rate risk: Interest rates and bond prices move in opposite directions.

Performance: It's important to look at a bond fund's total return over time. Total return takes into account the market value of its bonds + the income from them. Investors interested in income should look at the fund's 30-day yield.

Duration estimates how much a bond's price fluctuates with changes in comparable interest rates. If rates rise 1.00%, for example, a fund with a 5-year duration is likely to lose about 5.00% of its value.

Before you get your savings bonds, consider this: You need to buy a roof over your head, get health insurance, save up enough money for a year off work, pay off outstanding debts, and secure your children's education. After all that you can consider playing the stock market with what's left. Doing anything else imperils your future.

Another trick I use is to type 'savings bonds forum' into a search engine, and see what comes up. If you find a lively forum, you can ask questions about the broker you're keen on, or ask for other users' recommendations. WARNING: Some touts for brokers lurk in these forums; you may not get unbiased advice. Also, some posters are overly negative; they hate everyone! Or they are fools, or ignorant. Search thoroughly: you'll know the truth when you find it.

• When bonds mature, you receive the bond's par value.
• The coupon rate is the amount of interest, expressed as a percentage of par value.
• Yield is the amount of interest the bond will pay in one year divided by its current price.
• The maturity date is when you'll receive the principal that you invested.