How To Buy Bonds?

Savings bond is one of the safest investment plans. The savings bonds value increase with respect to market conditions. If the market situations are good, then you can earn a potential income through interests. Even if the market condition is low, you will not be stopped with interest. You will get it even if it is less. Therefore, according to me, it is always wise to buy savings bonds. If you are wondering as to how to buy bonds then this article is something you must make a mark of. Most of the bond transactions are completed with either discount brokerage or full service.

How To Buy Bonds?
So, wondering as to how to buy bonds? Well, there are 2 ways for it. You can

  • Either go with the help of online
  • Or take the support of a trusted or reputed bond broker

If you prefer going with the bond broker, let me tell you that they demand for a fee. Most of the bond brokers ask for an initial minimum deposit of about $5000. In case, you cannot afford this sum for savings bond, you can try looking for mutual funds (or bond fund).

Some financial sectors will offer its clients with transacting government securities service. On the other hand, if the bank does not offer this service & you don’t have brokerage account, it is better to buy government bonds with the help of government agency directly. In United States, one can pay money for the bonds directly to the government with the help of TreasuryDirect (Visit http://www.treasurydirect.gov). The TreasuryDirect was started with an intention to buy bonds straight away from Treasury, without even the need of a broker. The entire interest payments and transactions are performed electronically.

In case you decide purchasing a bond with a broker, there are chances that he / she might say that this kind of trade is completely commission free. Never be fooled! Never trust! What normally happens is — a broker marks the prices slightly. The markup is same as commission. In order to ensure that you aren’t being fooled, just look at the latest quotes of the bond & determine whether respective markup is truly acceptable or not. Keep in mind; you must do little research on various bonds just as you would do with stocks. Better to do some homework! I hope you are now clear with the question as to how to buy bonds.