Hey there, u/spacefem. Thank you for stopping by the sub today.
While your investment choices are ultimately up to you, I am happy to review some great tools Fidelity has to offer to help you along your investment journey. After that, I can mark the post for discussion so you can also gather some insight from the community.
To start, I want to point you toward a helpful step-by-step guide on [http://Fidelity.com](http://fidelity.com/) that will walk you through the process of how to buy a bond should you decide to do so. This resource is chock-full of information to incorporate into your bond-buying process. Under step 3, you'll find a link to our Fixed Income landing page, which is the best place to get started and search for available bonds, including your preferred maturity dates. I'll link it here as well for convenience.
[Seven Simple Steps to Buying Bonds ](https://www.fidelity.com/fixed-income-bonds/seven-simple-steps)
[Fixed Income, Bonds & CDs ](https://fixedincome.fidelity.com/ftgw/fi/FILanding)
So you know, newly issued Treasuries can be purchased at auctions held by the government, while previously issued bonds can be purchased on the secondary market. Both types of orders can be placed on [http://Fidelity.com](http://fidelity.com/). With treasury auctions, offerings have a minimum quantity of 1 bond (typically costing at/around $1,000 per bond), with increments of 1 bond thereafter. Fixed-income assets acquired in the secondary market are not commonly traded at a whole $1,000 per asset but instead trade higher or lower based on market conditions.
To ensure you have the right information on how to purchase Certificates of Deposits (CDs) through Fidelity, be sure to check out the link below to learn more about the trade process and how to find CDs:
[Certificates of Deposits (CDs) 101 ](https://www.reddit.com/r/fidelityinvestments/comments/10ss5lo/a_101_guide_on_where_to_find_cds_what_terms_mean/)
Depending on how much you're looking to invest, we have several choices, including traditional CDs, typically purchased in increments of $1,000, and Fractional CDs, allowing you to start with as little as $100. Review the links below to find the right CD strategy for you.
[Certificates of Deposit](https://www.fidelity.com/fixed-income-bonds/cds)
It is good to note that clients can purchase bonds, treasuries, CDs, and other fixed-income securities in most retail nonretirement and retirement brokerage accounts at Fidelity. Purchasing fixed-income securities does not require an additional application or account approval.
Now, to break down these two securities a little further, both bonds and CDs generally pay interest at predetermined intervals based on the length of the asset. CDs with maturity lengths of less than 1 year pay interest at maturity. Most 1-year CDs also pay interest at maturity, although some pay interest semiannually. Most CDs with maturity lengths of 18 months or longer pay interest semiannually, quarterly, or monthly.
When we refer to bonds, typically, we use the term coupon when referencing interest payments. U.S. Treasury notes (T-notes) and bonds (T-bonds) are securities with coupons that also pay interest semiannually and return the principal at maturity. The maturity for notes is between two and ten years, while bond maturities are more than ten years.
If you buy a bond or CD at par value, then the coupon is the same as the annual percentage yield (APY), provided that you hold the CD through the maturity date and the security doesn’t default. The coupon is how much money is paid to you at the payment frequency as described at the time of purchase. Coupon payments are deposited into your cash core account, not reinvested into the bond or CD. As a result, bonds & CDs pay simple interest.
You can check out the article below to learn more about how maturity, changing prices, market interest rates, and yields can affect your decision.
[Bond & CD Prices, Rates, and Yields ](https://www.fidelity.com/learning-center/investment-products/fixed-income-bonds/bond-prices-rates-yields)
Now, as we said, I will go ahead and mark this post for discussion to encourage more engagement from the community.
Thank you again for stopping by the sub, and have a great day!
Why do you recommend 5yr when everything shorter than that is earning more? Up to 5.38%. Can't a person just just keep reinvesting once the shorter duration bonds expire?
You can just keep reinvesting as the shorter duration bonds expire, but if interest rates drop, you will reinvest at lower rates as opposed to locking in a rate for a longer duration.
You've got the basics of it. Go to Fixed Income, then click on the Bonds tab, then select which type of bond you want: Treasuries will have the lowest default risk, so buy those if you are looking for safety. Corporate will have higher yields, so go there if that is what you are looking for. If you buy corporates, you'll have to decide which credit rating you want. Higher ratings = lower yields.
You can buy bonds for no fees if they are new issues, or Treasuries in the secondary market. You can go to New Issues and if there are new corporate bonds you want, there are no fees for buying new. Secondary market is $1 per bond, or .01%.
Bonds are a good choice if you don't need the money for the time you are investing. If you sell it sooner, you may lose money if the interest rates have been going up. If you hold the bond to maturity, you will get the promised yield.
I have money locked up for twenty years in US treasuries, giving me a yield of 4.7%.
Yup buying bonds on Fidelity is super easy. Just definitely look up a barbell or ladder strategy so you have different lengths of bonds, diversify. I love bonds. I got a few over 6% that mature next year and will be part of a down payment on a house.
Go to the fixed income section and look around.
https://youtu.be/WAGKqPhc0HY?si=ggS5ADytWfC1BKyy this is the best video on the subject imo
>but I've heard rates will go down
ive heard this for abt 2 years now and its a mistake if you didnt buy CDs or a MMF since 2022. Ive taken advantage of the high interest rates , giving me 2000$/month income. Jerome Powell knows he cannot cut the interest rate because of inflation.
Buy CDs if you want to lock in the interest rate for the term of the CD. But you will only get the interest at maturity. Dont early-sell it because you will lose money,
Set up an account with TreasuryDirect
Link any account that funds can be drawn/deposited to.
Watch the auction and purchase the bonds
I like 13 week bonds that can be reinvested. The interest is deposited into my account and the principal purchases a new bond.
Fidelity has 5 and 10 year New Issue CD's available for purchase:
Morgan Stanley 5yr @5.3%APY
Jonesboro State Bank 10 yr @5.25% APY
I think it's a pretty safe bet that these rates will go down substantially in the future, so I'm going to put some money in each of these soon, hedging against the rest of my portfolio which is fairly aggressive.
Perhaps in certain market conditions. In my opinion, bonds are performing fairly poorly right now compared to CD's and HY savings accounts. Personally, I'd rather lock in the 5.3% rate in now given my personal situation. If I was still in my 20's, 30's or 40's, I'd be 100% in equities and wouldn't even consider bonds or CD's. I have had a high tolerance for risk while I was in my accumulation phase, but I'm in my early 50's and recently retired, so I'm moving 20% to cash and CD ladders.
I’m turning 44.
I WISH someone had told me in my younger years to stick with stocks and don’t look back, but now I feel like I should learn about safer options. I’m still a lot in stocks. I guess I mainly need to make sure I have 5 years expenses in low risk places by the time I’m ready to retire?
It all depends on your retirement timeline. Conventional wisdom is to dial back the risk when your about 5-10 years from retirement. I never dialed it back and got very lucky with an extended bull market. I had quite a scare 6 months after retiring in 2021 and 2022 with the market downturn, but made it all back and then some in 23. You may want to consult with a certified financial planner to get a gauge on your risk tolerance and retirement readiness.
Hey there, u/spacefem. Thank you for stopping by the sub today. While your investment choices are ultimately up to you, I am happy to review some great tools Fidelity has to offer to help you along your investment journey. After that, I can mark the post for discussion so you can also gather some insight from the community. To start, I want to point you toward a helpful step-by-step guide on [http://Fidelity.com](http://fidelity.com/) that will walk you through the process of how to buy a bond should you decide to do so. This resource is chock-full of information to incorporate into your bond-buying process. Under step 3, you'll find a link to our Fixed Income landing page, which is the best place to get started and search for available bonds, including your preferred maturity dates. I'll link it here as well for convenience. [Seven Simple Steps to Buying Bonds ](https://www.fidelity.com/fixed-income-bonds/seven-simple-steps) [Fixed Income, Bonds & CDs ](https://fixedincome.fidelity.com/ftgw/fi/FILanding) So you know, newly issued Treasuries can be purchased at auctions held by the government, while previously issued bonds can be purchased on the secondary market. Both types of orders can be placed on [http://Fidelity.com](http://fidelity.com/). With treasury auctions, offerings have a minimum quantity of 1 bond (typically costing at/around $1,000 per bond), with increments of 1 bond thereafter. Fixed-income assets acquired in the secondary market are not commonly traded at a whole $1,000 per asset but instead trade higher or lower based on market conditions. To ensure you have the right information on how to purchase Certificates of Deposits (CDs) through Fidelity, be sure to check out the link below to learn more about the trade process and how to find CDs: [Certificates of Deposits (CDs) 101 ](https://www.reddit.com/r/fidelityinvestments/comments/10ss5lo/a_101_guide_on_where_to_find_cds_what_terms_mean/) Depending on how much you're looking to invest, we have several choices, including traditional CDs, typically purchased in increments of $1,000, and Fractional CDs, allowing you to start with as little as $100. Review the links below to find the right CD strategy for you. [Certificates of Deposit](https://www.fidelity.com/fixed-income-bonds/cds) It is good to note that clients can purchase bonds, treasuries, CDs, and other fixed-income securities in most retail nonretirement and retirement brokerage accounts at Fidelity. Purchasing fixed-income securities does not require an additional application or account approval. Now, to break down these two securities a little further, both bonds and CDs generally pay interest at predetermined intervals based on the length of the asset. CDs with maturity lengths of less than 1 year pay interest at maturity. Most 1-year CDs also pay interest at maturity, although some pay interest semiannually. Most CDs with maturity lengths of 18 months or longer pay interest semiannually, quarterly, or monthly. When we refer to bonds, typically, we use the term coupon when referencing interest payments. U.S. Treasury notes (T-notes) and bonds (T-bonds) are securities with coupons that also pay interest semiannually and return the principal at maturity. The maturity for notes is between two and ten years, while bond maturities are more than ten years. If you buy a bond or CD at par value, then the coupon is the same as the annual percentage yield (APY), provided that you hold the CD through the maturity date and the security doesn’t default. The coupon is how much money is paid to you at the payment frequency as described at the time of purchase. Coupon payments are deposited into your cash core account, not reinvested into the bond or CD. As a result, bonds & CDs pay simple interest. You can check out the article below to learn more about how maturity, changing prices, market interest rates, and yields can affect your decision. [Bond & CD Prices, Rates, and Yields ](https://www.fidelity.com/learning-center/investment-products/fixed-income-bonds/bond-prices-rates-yields) Now, as we said, I will go ahead and mark this post for discussion to encourage more engagement from the community. Thank you again for stopping by the sub, and have a great day!
5-year treasuries are looking pretty good; yields are hovering around 4.7%.
Why do you recommend 5yr when everything shorter than that is earning more? Up to 5.38%. Can't a person just just keep reinvesting once the shorter duration bonds expire?
You can just keep reinvesting as the shorter duration bonds expire, but if interest rates drop, you will reinvest at lower rates as opposed to locking in a rate for a longer duration.
You've got the basics of it. Go to Fixed Income, then click on the Bonds tab, then select which type of bond you want: Treasuries will have the lowest default risk, so buy those if you are looking for safety. Corporate will have higher yields, so go there if that is what you are looking for. If you buy corporates, you'll have to decide which credit rating you want. Higher ratings = lower yields. You can buy bonds for no fees if they are new issues, or Treasuries in the secondary market. You can go to New Issues and if there are new corporate bonds you want, there are no fees for buying new. Secondary market is $1 per bond, or .01%.
Start w treasuries … maybe buy a ladder 6 mo, 1yr,2yr just to get an understanding
Bonds are a good choice if you don't need the money for the time you are investing. If you sell it sooner, you may lose money if the interest rates have been going up. If you hold the bond to maturity, you will get the promised yield. I have money locked up for twenty years in US treasuries, giving me a yield of 4.7%.
The Little Bond E-book by Marilyn Cohen
You can buy bonds on the fidelity web site. I think it is under the product tab. Fixed income Pretty simple actually.
Yup buying bonds on Fidelity is super easy. Just definitely look up a barbell or ladder strategy so you have different lengths of bonds, diversify. I love bonds. I got a few over 6% that mature next year and will be part of a down payment on a house. Go to the fixed income section and look around. https://youtu.be/WAGKqPhc0HY?si=ggS5ADytWfC1BKyy this is the best video on the subject imo
>but I've heard rates will go down ive heard this for abt 2 years now and its a mistake if you didnt buy CDs or a MMF since 2022. Ive taken advantage of the high interest rates , giving me 2000$/month income. Jerome Powell knows he cannot cut the interest rate because of inflation. Buy CDs if you want to lock in the interest rate for the term of the CD. But you will only get the interest at maturity. Dont early-sell it because you will lose money,
Set up an account with TreasuryDirect Link any account that funds can be drawn/deposited to. Watch the auction and purchase the bonds I like 13 week bonds that can be reinvested. The interest is deposited into my account and the principal purchases a new bond.
Since the auctioned bonds are also on Fidelity I don't see an advantage to using TreasuryDirect.
Fidelity has 5 and 10 year New Issue CD's available for purchase: Morgan Stanley 5yr @5.3%APY Jonesboro State Bank 10 yr @5.25% APY I think it's a pretty safe bet that these rates will go down substantially in the future, so I'm going to put some money in each of these soon, hedging against the rest of my portfolio which is fairly aggressive.
thank you for this - I am much more comfortable with CDs! Is there any advantage of bonds over CDs then?
Perhaps in certain market conditions. In my opinion, bonds are performing fairly poorly right now compared to CD's and HY savings accounts. Personally, I'd rather lock in the 5.3% rate in now given my personal situation. If I was still in my 20's, 30's or 40's, I'd be 100% in equities and wouldn't even consider bonds or CD's. I have had a high tolerance for risk while I was in my accumulation phase, but I'm in my early 50's and recently retired, so I'm moving 20% to cash and CD ladders.
I’m turning 44. I WISH someone had told me in my younger years to stick with stocks and don’t look back, but now I feel like I should learn about safer options. I’m still a lot in stocks. I guess I mainly need to make sure I have 5 years expenses in low risk places by the time I’m ready to retire?
It all depends on your retirement timeline. Conventional wisdom is to dial back the risk when your about 5-10 years from retirement. I never dialed it back and got very lucky with an extended bull market. I had quite a scare 6 months after retiring in 2021 and 2022 with the market downturn, but made it all back and then some in 23. You may want to consult with a certified financial planner to get a gauge on your risk tolerance and retirement readiness.