With certain investment projects, you may have the option to choose how you receive the interest payments. One option is to have the interest transferred directly to your bank account as cash. Alternatively, you can opt to receive vouchers for goods or services from the company with each interest payment.
Interest in kind has the advantage of providing additional benefits beyond the cash interest. Many companies offer an extra "bonus" when providing interest in kind. For example, let's say a project offers a 4% cash interest rate and a 6% interest in kind. In this case, the interest in kind comes with a bonus of 50%, providing a greater value compared to the cash interest alone.
Choosing between cash interest and interest in kind allows you to tailor the investment to your preferences and potentially enjoy additional benefits through the bonus associated with interest in kind.