Find your way through the ins and outs of income-producing investments with this straightforward guide to what's available.

Guaranteed Income Bonds  These are low-risk single premium bonds that secure a guaranteed regular income until maturity, at which time your original premium is returned. These bonds often have set terms of one, two or three years and are taxed as life insurance products. With guaranteed income bonds your capital is safe - except, of course, from inflation. 

High-income Bonds  Like guaranteed income bonds, high-income bonds are single premium insurance bonds, usually for a period of three or five years. They differ in that they are linked to one or more stock markets, which gives you the potential for a steady higher income but also makes your investment more speculative. 

Corporate Bonds  These are issued by public companies hoping to raise money.  In return for your loan the companies pay out a fixed income that is usually higher than gilts. Your rate of income is determined by the extent to which the company issuing a bond needs to raise capital. Corporate bonds are rated according to their financial security and can be held in an ISA.

With-profits Bonds  With-profits bonds are lower-risk investments in insurance company funds. They consist of a variety of assets, such as shares, fixed interest securities and property. Companies declare an annual bonus to be paid out to its fund holders - once added, a bonus cannot be taken away, although rates of future bonuses cannot be guaranteed. Investors trying to exit a fund early in times of poor performance may be subject to an exit penalty, called a 'market value adjuster'. This is intended to protect other investors in the with-profits fund.  Although these bonds are designed to produce growth over the longer term, they are often used for income purposes as policyholders can take an annual withdrawal of up to 5% for a maximum of 20 years (deemed a return of capital) without any immediate liability to personal taxation.

Distribution Bonds  These lower-risk bonds pay a quarterly or half yearly distribution of dividends that can be used as income or rolled up within the bond. Because the bonds invest in a combination of shares and fixed-interest securities, you can generally obtain better returns than with a traditional deposit account, although unlike a deposit account the full return of your capital is not guaranteed.  

Equity Income Bonds  Equity income funds invest mainly in shares, although they may include some fixed income securities. They aim to provide an income from dividends paid by the companies they invest in. This income may start off at a fairly low rate, but it has the potential to increase over the years due to the growth of the company issuing those shares. These funds are suitable for investors who have no immediate need for high income. In addition to income, you may also see significant growth in your initial capital, although this is not guaranteed and your capital could of course fall.