What is a bond?
Bonds are debt securities. When you invest in bonds, you loan your principal for the promise of repayment with interest. However, fixed income products can be complex, don't guarantee against loss and carry different risks.
Fixed income products include, but are not limited to:
- U.S. Treasuries: Bonds issued by the U.S. government are guaranteed as to the timely payment of principal and interest if held to maturity
- U.S. government agency bonds: Federal agencies, such as Freddie Mac and Sallie Mae, issue bonds with different terms, structures and risk
- Corporate bonds: Private companies raise capital by issuing bonds that get grades on their investment quality
- Municipal bonds: Issued by state and local governments, "munis" may offer income exempt from federal, state and local taxesFootnote 1
- CDs: Certificates of deposits (CDs) are usually issued by commercial banks and insured by the FDIC
Bond investing
Where do bonds fit in your portfolio? This tutorial will introduce you to different types of bonds and explore their potential benefits and risks.
Merrill Edge Investing
Classroom
Learn at your own pace with online courses that include:
- Bond market interest rates
- Buying bonds
- The process of issuing bonds
How bonds fit within your portfolio
Creating a diversified bond portfolio with appropriate levels of risk that performs reasonably well even when markets don't move as expected can help you stay on course toward your investment goals.
Asset allocation and
your portfolioFootnote 2 (1:48)
When deciding how to allocate your money among different investments, be sure to consider your goals, investment experience, time frame, liquidity needs and your comfort level with risk.
Merrill Edge Investing
Classroom
You can take online classes that include:
- Introduction to government bonds
- Junk bonds
- Callable bonds
How to choose a bond or CD
Whether you're just starting out or seeking fresh ideas, Merrill Edge provides timely and relevant tools and resources to help you along each step of your investing journey.
Bond categories (1:34)
This brief video can help you better understand different types of bonds.
Understanding bonds
and their risks
Buying bonds is like riding a seesaw. Bond prices increase when interest rates fall, and vice versa. Understanding this concept is key to bond investing.
Criteria to consider
Some of the risks investing in bonds and CDs include:
Fixed income definitions
View fixed income definitions from our Glossary:
- Bond equivalent yield
- Callable bond
- Par value
- Yield to maturity
Merrill Edge Investing
Classroom
Advanced courses about bonds include:
- Collateralized mortgage obligations (CMOs)
- Zero-coupon securities
- TIGRs, CATS and LIONs
Action items for fixed income investing
Identify your objectives, risk tolerance and time horizon
Decide which bonds match your investor profile
Explore the top fixed income performers
Search for bonds
Keep an eye on specific bonds in your
watchlist
Carefully review the company's information
Get price, ratings and earnings
alerts
Related resources
Let us help you narrow your choices
Merrill Edge MarketPro®
Use this powerful market analysis and trading tool to monitor your portfolio in real time, easily place trades and view interactive charts on a customizable dashboard.
Fixed Income Screener
You can filter a vast universe of bonds and CDs based on specific criteria you choose and adjust.
More you can do