How to Buy California Bonds

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California bonds finance the projects and activities of corporate and governmental entities.
California bonds finance the projects and activities of corporate and governmental entities. (Image: bond of the state loan, russia, 1951 year image by air from Fotolia.com)

"A bond is a debt investment in which an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate," according to Investopedia. The corporate or government entity uses the bond-sale proceeds to finance company expansion, for example, or civic projects. If you’re interested in financing projects and activities in California, you can buy California bonds.

Things You'll Need

  • Brokerage account
  • Cash in account

Open a brokerage account with an investment company that has the ability to purchase California bonds. You cannot buy California bonds directly from the state. If you have a brokerage account, then make sure that the financial firm has access to buying California bonds.

Learn about the bonds or notes for sale. Visit the California state treasurer website to see what bond issues are for sale. California bonds are offered only through an Official Statement. Download the Preliminary Official Statement to learn the details of the bonds. You can learn about credit ratings, maturity dates and the types of projects the bond issuance is funding.

Discuss the bonds with your broker. After educating yourself on the California bonds you’re interested in buying, call your broker and discuss the options with him. Make sure your account is eligible to buy the California bonds you’re interested in and see what the broker thinks about the quality of each bond. Also, discuss the process of buying the bonds during the early order period so you’ll know when and how to place your order.

Place your bond order. When you’re ready to buy the California bonds, contact your broker and place your order.

Tips & Warnings

  • Since each brokerage firm has different account-opening requirements and time frames, open your account before the bond you want to buy goes on sale to ensure there isn't a delay in making a purchase.

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