How To Buy Bonds?

There is much talk these days about investing in bonds.  If one I interested they may know what bonds are and how they function, however there still remains the question on many people’s minds: How to buy bonds?  The answer is that bonds can be purchased from many sources including the following most commonly used places:


Brokerage Firms: most stock brokerage firms also offer bonds transactions.  When buying bonds from a brokerage firm keep in mind that most firms will require a minimum investment amount.  This amount can be as high as $5,000

Mutual Bond Funds: an alternative to buying bonds yourself, you can buy bonds using a mutual bond fund.  Much like a mutual fund, mutual bond funds group together investors and purchase bonds using a fund manager.  The individual investor does not own the bonds themselves, but rather is investing in bonds based on the funds overall performance buying, selling and holding bonds.

Government Direct: in the United States one can buy bonds, government bonds, direct from the government themselves.  The US Treasury Department is the primary issuer of government bonds, and operates a website www.treasurydirect.gov which allows persons investing in bonds to buy online.

Bond Fees: Avoid Being Ripped Off

If buying bonds using your existing brokerage firm or one you have located for the purpose of buying bonds: beware of commission free bond advertising.  While they exist legitimately, in most cases when a brokerage fee says there will be no commission fee added to a bond transaction, there will be an extra cost.  The commission fee will come in the form of the broker inflating the cost of bond amount being offered to you.  To avoid this check the bond price amount against the open bond market or buy direct from the US Treasury.

Related posts:

1. What are Government Bonds?
2. What Are Interest Bonds?
3. What Are Treasury Bonds?
4. What Is The Bond Index?
5. What is A Bond Fund?