Buying & selling bonds
You can buy and sell almost any type of bond denominated in U.S. dollars through Vanguard Brokerage.
POINTS TO KNOW
- Our bond selection is extensive, but you can narrow your choices according to criteria you specify.
- Understand the different bond types and their features before you trade.
- It's easy to research bonds online and then place your order.
Bond offerings that can help meet your goals
Bond types & features
Get details on the types of bonds you can buy and sell.
U.S. Treasury bonds
Government agency & corporate bonds
Both new and secondary issues are available.
New issues: Maturities ranging from 1 month to 30 years; trading during the specified offering period; minimum purchase of $10,000.
Secondary issues: Minimum purchase of $1,000; commissions apply.
We offer only secondary issues of municipal bonds.
- Most municipal bonds are issued and traded in $5,000 denominations.
- Commissions apply.
We offer new and secondary issues, usually issued in $25 denominations.
New issues in the primary market: Commissions may apply if Vanguard Brokerage doesn't receive a concession from the issuer.
Transactions in the secondary market: Commissions may apply.
May have call provisions allowing the issuer to buy back the securities at a fixed price before the stated maturity date.
Bonds generally pay interest (the coupon amount) to bondholders semiannually.
Research bond offerings online and then get ready to place your order. You'll need to know the following information:
- Brokerage account number.
- Quantity to be purchased.
- Desired credit quality.
- Dollar price restriction. (Will you pay a premium over the face value (par), or are you looking for a bond that's been discounted below par?)
- Maturity range.
- CUSIP number, if available.
- Other relevant criteria, such as specific states for municipal bonds.
For sales or bids:
- Brokerage account number for the account holding the securities you want to sell.
- Quantity to be sold.
CDs & bonds
A loan made to a corporation or government in exchange for regular interest payments. The bond issuer agrees to pay back the loan by a specific date. Bonds can be traded on the secondary market.
An investment, such as a bond, that offers returns in the form of interest payments.
The length of time between a bond's issue date and when its face value will be repaid.
The income return on an investment usually expressed as a percentage of the investment's cost, current market value, or face value.
A measure of a bond issuer's ability to repay interest and principal in a timely manner.
The process of selling bonds to investors. It starts when the Treasury announces how much money it intends to borrow, the bonds' terms (length), and the auction date.
A market where investors buy and sell to each other (rather than buying directly from a security's issuer). Most stock and bond trading happens on the secondary market.
Treasury securities whose return fluctuates with inflation. The principal increases with inflation and decreases with deflation. TIPS pay a fixed coupon rate.
An investment that represents part ownership in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits.
A security that takes precedence over common stock when a company pays dividends or liquidates assets. Preferred securities do not usually carry voting rights.
A security that allows the issuer to repurchase or redeem it prior to its maturity date.
A bond being sold for a price higher than its face value.
A bond being sold for less than its face value.
A unique 9-character code for each security approved for trading in the United States. It's supplied by the Committee on Uniform Securities Identification Procedures.
A fee charged by a broker for executing a securities transaction.
A negotiable debt obligation issued by the U.S. government for a specific amount and maturity. Income from Treasury securities is exempt from state and local tax, but not from federal income tax. Treasury securities include Treasury bills (T-bills), Treasury notes (T-notes), and Treasury bonds (T-bonds).
Low-risk debt obligations that are issued by the United States government.
A bond issued by a corporation rather than by a government. The credit risk is based on the appraised payment ability of the company that issued the bond and its willingness to pay.
Income you can receive by investing in bonds or cash investments. The investment's interest rate is specified when it's issued.