How do I Buy Swiss Bonds Through a Bank?
You cannot buy Swiss bonds from your bank but you can buy Swiss bonds through the brokerage section of your bank's holding company. Most banks house offices for licensed investment professionals to sell non-bank products such as stocks, bonds and mutual funds. Banks only sell products covered by the Federal Deposit Insurance Corporation but investment representatives sell both FDIC insured products and other securities. The Swiss government, like governments in most nations, regularly issues bonds to raise capital for short-term expenses. Bondholders receive a return of premium and interest when the bonds mature. Governments raise funds through taxes and revenue from toll roads and other services to pay bondholders back.
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Instructions
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Call your financial institution and ask to speak with an investment representative. Arrange a time to open a brokerage account. There are different levels of investment advisers and many are only able to sell mutual funds, so make sure the adviser holds the series seven license needed to sell individual stocks and bonds.
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Go to the investment adviser's office. Provide the adviser with your government-issued identification and a check to fund the brokerage account. You must provide general information pertaining to your annual income and assets because the U.S. Securities and Exchange Commission and state regulators require advisers to maintain customer records that illustrate the suitability of investment products for them. Advisers risk fines and suspensions if they encourage people with minimal assets to invest a large percentage of their money in high-risk investment vehicles. The adviser will ask you to sign a new account agreement form, and other forms that demonstrate your understanding of the risks associated with investing.
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Invest in a single bond or buy several bonds. The adviser will provide you with a list of Swiss bonds. The terms and yields vary. Discuss the pros and cons of the available bonds with the adviser before making a decision. The adviser will place the order. Typically, orders process the same day. After completion of the order, your statement will show you the number of bonds held and the market price. You can sell the bonds at any time.
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Tips & Warnings
Brokerage firms normally charge a flat transaction fee for purchases of individual stocks and bonds. To minimize your costs, buy several bonds at once rather than in small increments.
Swiss government bonds are priced in Swiss francs which means your interest payments vary whenever the U.S. dollar strengthens or weakens against the Swiss currency. Foreign bonds are a safe harbor for people who expect the dollar to weaken but do not provide a steady source of income for people seeking to supplement employment or retirement income. The bonds are backed by the financial strength of the Swiss government and expose investors to default risk.
