Where to Buy Corporate Bonds Online and Achieve Long-term Goals

If you're looking to invest in corporate bonds online, you have several options to choose from. One popular platform is Robinhood, which allows you to buy and sell corporate bonds with no commission fees.

Another option is Ally Invest, which offers a wide range of corporate bonds to invest in, including those with high credit ratings. For example, you can invest in bonds issued by companies like Apple and Microsoft.

You can also consider investing in corporate bonds through online brokerages like Fidelity and Vanguard. These platforms often have lower fees and more investment options than traditional brokerages.

Investing in corporate bonds online can be a great way to achieve long-term financial goals, such as saving for a down payment on a house or retirement.

You can buy corporate bonds directly from corporations, such as SolarBonds, which offers bonds with terms from three months to 15 years for a minimum investment of $1,000. This way, you can avoid investment fees.

Alternatively, you can work with online brokerages, banks, bond traders, or brokers to buy corporate bonds. Some recommended brokerages include Fidelity and E*TRADE, which offer investor education webinars.

To get started, you can set up a brokerage account with one of these online brokerages, such as Benzinga's top picks, which have been reviewed and ranked for their corporate bond offerings.

You can find individual issues of U.S. Treasury, municipal, and corporate bonds through brokerage firms. These firms often have bond screening tools or Fixed Income products that can help you find new issues or secondary offerings.

Brokerage firms typically require a minimum investment of $5,000 or higher. You can also use bond screening tools to find what you're looking for.

Bond mutual funds and ETFs are readily available through brokerage firms, and you can buy and sell shares just like you would with stock mutual funds and ETFs. You can start with a minimum investment of about $100 for a bond ETF share.

Some brokerage firms offer investment-grade bonds, high-yield or junk bonds, municipal bonds, and more. You can choose from a variety of options to suit your investment goals.

You can also use brokerage firms to buy bond funds, which can be a convenient option for adding bonds to your portfolio.

Long-term bonds are debt securities with maturities over 10 years, carrying risks like inflation and interest rate changes.

Inflation can make future interest payments less valuable, while rising interest rates can lower existing bond values. Long-term bonds offer higher interest rates to offset these risks.

If a company struggles financially, bondholders are paid before stockholders from liquidated assets, making them an important part of a company's financial structure.

Historically, corporate bonds have provided solid returns over the long term, surpassing the benchmark U.S. 10-year Treasury bond in cumulative returns since 2003.

In shorter rolling periods of one to 15 years, corporate bonds have demonstrated better performance, indicating their potential for consistent long-term growth and stability across different economic conditions.

Buying corporate bonds online offers numerous benefits, including seeing the largest amount of corporate bond quotes and minimizing corporate bond bid-offer spreads.

Individual investors can typically execute trades at bond prices just as good as the world's largest bond investors, thanks to the technology-enabled marketplace.

Investing in corporate bonds involves several important considerations, such as credit quality, yield, maturity, and the financial health of the issuing company.

Interest rate changes, market conditions, and the broader economic climate are key to bond performance, and investors should assess the trade-offs between yield and risk.

There are millions of muni bond CUSIPs, resulting in trading activity to be distributed across a huge number of bonds, whereas trading activity is concentrated across a smaller number of corporate bonds, making them more attractive to individual investors.

Investors can choose from a range of corporate bonds, including investment-grade and high-yield options, to fit their risk tolerance and financial goals.

Corporate bonds offer higher yields than government bonds, making them appealing for those wanting to increase their income.

Investors should understand the priority of claims if a company goes bankrupt, as this affects the bondholder's risk.

Bond investors benefit from many advantages when they buy corporate bonds online, including paying the lowest brokerage commissions and enjoying fast and efficient trade execution.

Corporate bonds can be categorized based on their maturity, interest payments, and credit rating.

Maturity is a key factor in determining the type of corporate bond, with terms ranging from three months to 15 years.

Investors can buy bonds directly from corporations, such as SolarBonds, with a minimum investment of $1,000.

Direct purchases allow investors to avoid investment fees.

A prospectus is available to explain the risk associated with the investment.

You can buy corporate bonds directly from the corporation, which is a great way to avoid investment fees. This is possible with bonds like SolarBonds, which offer terms ranging from three months to 15 years for a minimum investment of $1,000.

To buy corporate bonds, you'll need to lend money to the corporation, which will then make a legal commitment to pay interest on the principal when the bond comes due. This is essentially an IOU, and the corporation might issue bonds to fund various projects or refinance debt.

You can also find corporate bonds through brokerage firms, which often offer new issues or secondary offerings through bond screening tools or Fixed Income products. The minimum investment may be $5,000 or higher, and you can also buy bond mutual funds or ETFs, which may contain investment-grade bonds, high-yield or junk bonds, and more.

Medium-term bonds offer a balance between short-term and long-term investments.

They have maturities of three to ten years, providing higher returns than short-term bonds with less risk than long-term bonds.

These bonds can generate steady income with reduced interest rate risk, making them attractive to investors seeking growth and stability.

Investors can integrate medium-term bonds with short-term and long-term investments to optimize returns and manage risks.

One strategy is to ladder bond investments by purchasing medium-term bonds at staggered maturities, allowing for liquidity and taking advantage of changing interest rates.

Corporate bonds are issued in blocks with a face or par value of $1,000. This is the minimum amount you'll need to invest in a bond.

The face value of a bond is the amount that the issuer promises to pay back to the bondholder at maturity. For example, Bond X has a face value of $1,000.

Bondholders collect interest payments at predetermined dates according to the terms of the bond. For Bond X, this means collecting $30 in interest every year.

Most corporate bond trading occurs in the secondary market, also known as the over-the-counter (OTC) market. This means you'll need to use a broker or dealer to facilitate the purchase or sale of a bond.

Bond prices are often traded at either a premium or a discount relative to their par value. For instance, Bond Z is trading at an $80 premium relative to its face value.

The yield to maturity (YTM) is an essential calculation in determining a bond's value. It calculates the annual return on a bond if it is held to maturity, taking into account the bond price and date of purchase.

Here's a comparison of the YTM for three bonds:

As you can see, the YTM for Bond Y is higher than its coupon rate due to its discounted price.

A corporate bond is essentially an IOU, where you lend money to a corporation that issues them, and in return, they make a commitment to pay interest on the principal when the bond matures.

To buy a corporate bond, you'll need to set up a brokerage account with an online brokerage, bank, bond trader, or broker. You can choose from various options, but it's essential to select a reputable one.

Consider the nuances of risk and evaluate your risk tolerance level before investing in corporate bonds. If you're ready to proceed, you can start by looking at the best online brokerages to buy corporate bonds.

Some popular brokerages for buying corporate bonds include Fidelity and E*TRADE, which offer a range of investment products, including bond mutual funds and ETFs. These can be a great option for those who want to hold bonds without having to buy individual bonds.

You can find individual issues of corporate bonds through brokerage firms, but be prepared for minimum investment requirements, which can be as high as $5,000 or more. Alternatively, you can invest in bond mutual funds or ETFs, which often have lower minimum investment requirements, starting at around $100 for a single bond ETF share.

You can see a large number of corporate bond price quotes online, which helps minimize bid-offer spreads. Typically, for each corporate bond available on an online brokerage, there will be five to twelve dealers providing live-and-executable bid-offer quotes.

Online brokerages like Fidelity can mark up corporate bond prices by as little as 0.1 points, which is equivalent to $1 per $1,000 face value of bonds. This is in sharp contrast to traditional brokerages, which often charge a two-point markup.

For example, a bond quoted at 100.094 could be shown to a customer of a traditional brokerage at 102.094, a two-point markup. This bond brokerage commission is equivalent to $20 per bond, or 20x the amount charged on Fidelity.com and other online brokerages.

Minimizing transaction and management fees is a key advantage investors receive when they buy bonds online. By buying bonds online, an investor can save thousands of dollars in financial advisor fees, as much as $48,000 in some cases.

Investment-grade bonds are considered safer and more stable investments because they are less likely to default. These bonds are rated AAA or Aaa to BBB or Baa by the three major bond rating agencies, Standard & Poor's, Moody's, and Fitch.

Bonds rated BB or Ba or below are called junk bonds, which have higher yields but carry a greater risk of default. This is because they are issued by companies that have liquidity issues.

The three major bond rating agencies are Fitch, Moody's, and Standard & Poor's. They assess a corporation's financial strength to determine its creditworthiness.

Investment-grade bonds are of higher quality, typically viewed as very likely to pay their bondholders on time. Non-investment-grade bonds, also known as high-yield or "junk" bonds, are less likely to meet their debt obligations and therefore carry greater risk.

Here's a breakdown of investment-grade bond ratings from Moody's, Standard & Poor's, and Fitch:

Investors should consider engaging a qualified financial professional to determine a suitable investment strategy, as investing involves risk, including the possible loss of principal.

Corporate bonds have generally provided solid returns over the long term. Since 2003, corporate bonds have surpassed the benchmark U.S. 10-year Treasury bond in cumulative returns. This is a significant advantage, especially for investors looking for consistent growth and stability.

Corporate bonds have demonstrated better performance in shorter rolling periods of one to 15 years. This indicates their potential for consistent long-term growth and stability across different economic conditions.