How do you buy bonds?

24th Feb 2011 by admint

• Identify the different bonds available for you to purchase (corporate bonds, government bonds, mortgage bond, etc.)
• It would be advisable if you seek the help of a financial adviser to help you in choosing what type of bond to purchase and explain further these bonds to you.
 Know the pay out scheme of the interest. Select a bond that pays interest in a time period that’s suitable for you.
 Figure out the bond’s rating.
• Understand how interest rates work before buying bonds. Know that when interest rates rise, the bond you are holding could become less profitable.
• When ready to purchase bonds, purchase through a full-service broker. They charge a commission, but you'll be getting peace of mind in knowing that a professional is assisting you with your purchase, especially if you are a starter in buying bonds.
• You can also purchase bonds online. But this would require you to have an account of at least $5,000 with the brokerage firm you choose and they would be the one to assist you in buying bonds online.


This answer is the subjective opinion of the writer and not of FinancialAdvisory.com