What are bonds?
Bonds are loans you make to a government, government agency, or corporation, which they use to finance projects and other needs. The bond issuer agrees to repay you at a fixed interest rate by a specified date, or maturity.
You may want to consider investing in bonds if:
- You’re saving for a goal, like a house, or college, or are looking for fixed income in retirement.
- You want to focus on a specific credit quality or maturity.
- You'd like exposure to specific state or corporate issuers or to certain industries.
- You're looking for income with tax advantages.
Learn more from our video series:
Types of bonds
Understand the minimums and fees
Minimum amount
- For most bonds, $1,000, with additional purchases in increments of $1,000.
- For municipals bonds, $5000 with additional purchases in increments of $5000.
- All fixed income trades are subject to dealer minimums.
New issues
$0
Secondary trades
$1 per $1,000 invested
Start investing in bonds today
New to Vanguard? You'll need to create an account first.
Already a Vanguard client? Log in to buy bonds.
Start investing in bonds today
New to Vanguard? You'll need to create an account first.
Already a Vanguard client? Log in to buy bonds.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.
Bond funds are subject to interest rate risk, which is the chance bond prices overall will decline because of rising interest rates, and credit risk, which is the chance a bond issuer will fail to pay interest and principal in a timely manner or that negative perceptions of the issuer's ability to make such payments will cause the price of that bond to decline.
Investments in bonds are subject to interest rate, credit, and inflation risk.
While U.S. Treasury or government agency securities provide substantial protection against credit risk, they do not protect investors against price changes due to changing interest rates. The market values of government securities are not guaranteed and may fluctuate but these securities are guaranteed as to the timely payment of principal and interest.
Although the income from a municipal bond fund is exempt from federal tax, you may owe taxes on any capital gains realized through the fund's trading or through your own redemption of shares. For some investors, a portion of the fund's income may be subject to state and local taxes, as well as to the federal Alternative Minimum Tax.