Trust Signals
- Show typical spreads on your actual bond size.
- Document how different bond types behave in rate rises.
- Explain which bonds are in high demand vs. hard to find.
Savings & Income
Fixed Income & Bonds
Compare bond brokers by execution quality, spread transparency, and real inventory depth—not just product names. Your fill quality matters more than the menu.
What Spreads Really Tell You
Bond spread is the difference between what the broker paid and what you pay. A 1% spread on a $10,000 bond = $100 of extra cost.
Compare spreads on the exact bond types YOU plan to buy. A broker might crush spreads on Treasuries but mark up corporates heavily.
- Ask for typical spreads on the bond categories you care about.
- Compare the broker's quoted price to an independent source like Bloomberg.
- Factor bid-ask spread into your total cost calculation.
Broker Inventory And Availability
Some brokers have deep bond inventory; others source on demand. A deep inventory often means tighter prices and faster execution.
Ask which brokers stock the bonds you want. Not all brokers source corporate and high-yield bonds equally well.
- Test whether the broker has the bonds you want in stock.
- Compare fill speed when you place an order.
- Evaluate if the broker allows off-the-run bonds or only popular series.
Settlement And Account Operations
Bonds settle differently than stocks (usually T+2 or T+1). Ensure your broker handles settlement correctly and provides clear confirmations.
Call into support with a settlement question before you commit significant capital.
- Confirm settlement terms and accrued interest calculations.
- Request a sample bond trade confirmation.
- Verify coupon payment process and timing.
FAQ & Glossary
Should I use bond ETFs or individual bonds?
ETFs offer liquidity and diversification, while individual bonds offer maturity control. Choose based on your strategy and effort tolerance.
What is the biggest hidden risk in bond portfolios?
Duration risk: even high-quality bonds can drop significantly if interest rates rise quickly. Liquidity risk is often underestimated too.
What is Duration?
A measure of bond price sensitivity to interest rate changes. Higher duration = more sensitive to rate moves = bigger potential losses if rates rise.
What is Credit Risk?
The risk that a bond issuer defaults or stops paying interest. Lower-rated bonds have higher credit risk but offer higher yields.
What is Spread?
The price difference between what a bond broker paid for a security and what you pay when you buy it. Wider spread = higher cost to you.
What is Bid-Ask Spread?
The difference between the highest price someone will pay (bid) and the lowest price someone will sell (ask). Tighter spreads mean lower costs.
What is Treasury Bond?
A debt security issued by the U.S. government. Generally has the tightest spreads and lowest credit risk.
What is Yield Curve?
A graph of bond yields across different maturity dates. Slopes up (longer bonds pay more) or inverts (shorter bonds pay more) based on economic outlook.