With Profits Investment


“With profits” refers to the way the investment grows. In a with profits scheme you share in the profits of the issuing company. Each year you are normally paid a bonus on your investment (although there is no obligation for a bonus to be paid if the company has not done so well).
Companies that operate a with profits scheme may keep back some profits in a good year, so that they can pay bonuses in years that aren’t so good. This process is called smoothing. There may also be an end or terminal bonus paid when the investment matures.

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