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A guide to investing in CDs & individual bonds

You can rely on us to help you find the most competitively priced fixed income investments to meet your financial goals.

POINTS TO KNOW

  • You can buy CDs and U.S. Treasury, government agency, corporate, and municipal bonds through Vanguard Brokerage.
  • Fixed income products can be bought on the primary or secondary markets.
  • Using different bond strategies can help you get the most from your investments.

Buying & selling CDs

Your Vanguard Brokerage Account offers one-stop shopping for CDs (certificates of deposit) from banks across the country.

Buying & selling bonds

Finding the right match

Vanguard Brokerage doesn't hold an inventory of CDs and bonds. Instead, we maintain trading relationships with a large number of bond dealers.

The broker-dealers in our extensive network compete against each other to sell us securities, resulting in the best possible price for you.

And because we don't put up capital to maintain a bond inventory, we can pass our savings on to you. Our commissions, markups, and markdowns are among the lowest in the industry.

Our fixed income specialists can also research bonds that best meet your needs or help find a buyer who wants to purchase the bond you're selling.

Primary or secondary market: What's the difference?

Bond strategies: Ladders, barbells, and more

Several strategies are available to help you buy bonds that will meet your investment goals, time frame, and how much risk you're willing to take.


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See guidance that can help you make a plan, solidify your strategy, and pick the right investments.

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From mutual funds and ETFs to stocks and bonds, find all the investments you're looking for, all in one place.

REFERENCE CONTENT

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CD (certificate of deposit)

An insured, interest-bearing deposit that requires the depositor to keep the money invested for a specific period of time or face penalties. Brokered CDs can be traded on the secondary market.

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Fixed income investment

An investment, such as a bond, that offers returns in the form of interest payments.

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U.S. Treasury bond

A long-term security issued by the U.S. government, with a maturity of 10 years or more—most commonly 30 years.

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Government agency bond

A bond issued by a government agency, such as GNMA.

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Corporate bond

A bond issued by a corporation.

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Municipal bond

A debt obligation issued by a state, municipality, or local government authority. Interest paid on municipal bonds (also called "munis") is generally free from federal—and sometimes state and local—income taxes. As a result, yields on municipal bonds are usually lower than comparable taxable bonds.

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Primary market

The part of the market where new securities are issued. The primary market for stocks is an initial public offering (IPO). For bonds, purchasing on the primary market means you buy directly from the bond's issuer and pay face value.

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Secondary market

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.

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Securities

Stocks, bonds, money market instruments, and other investment vehicles.

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Broker/Broker-dealer

A licensed individual or firm that executes orders to buy or sell mutual funds or other securities for the public and usually gets a commission for doing so.

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Commission

A fee charged by a broker for executing a securities transaction.

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Settlement fund

A money market mutual fund that holds the money you use to buy securities, as well as the proceeds whenever you sell.

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Stock

An investment that represents part ownership in a corporation. Each share of stock is a proportional stake in the corporation's assets and profits.

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ETF (exchange-traded fund)

A type of investment with characteristics of both mutual funds and individual stocks. ETFs are professionally managed and typically diversified, like mutual funds, but they can be bought and sold at any point during the day using straightforward or sophisticated strategies.