How to Buy Bonds Online
While buying bonds online isn't as easy as buying stocks online, it's cheaper to buy them from Web sites than from retail brokers.
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Instructions
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Open an account with an online broker or dealer that sells bonds. Most dealers will require that you open an account with at least $5,000.
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Deposit the required amount in the account by mailing a check to the broker or dealer.
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Decide what type of bond you want to buy, then visit the Bond Market Association's Web site (bondmarkets.com) and check out yields and other features of the various bonds.
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Check out other Web sites that list bond information, looking for the best total returns, not just the best yields.
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Calculate a bond's "yield to call," or how much money you'll get if you redeem early. The higher the yield, the more money you'll make.
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Indicate which bond you want to buy and how much you want to invest.
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Keep in mind that the broker's commission is usually built into the bond price.
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Await verification. The brokerage will verify that you have enough money in your account to cover the transaction, then it will buy the bonds.
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Get confirmation of the purchase. You should receive a trade confirmation by mail several days after the bond has been bought.
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Buy government bonds directly from the U.S. Bureau of the Public Debt Web site (publicdebt.treas.gov). If you buy bonds on this Web site, you can pay by credit card or a bank debit card, provided the bank card carries the MasterCard or Visa logo.
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Tips & Warnings
If you don't have enough money to buy individual bonds or if you want a diversified, laddered portfolio of bonds, consider investing in a bond fund, or a mutual fund that focuses on bond investments.
