Bonds / CD (Certificate of Deposit)

Bonds and CDs are fixed income investments i.e. they provide a fixed rate of return on your investment often pretty low e.g. 5%-10%. In comparing rate of return, Bonds pay a slightly higher interest rate than CDs. Often viewed as a steady income source, investing in Bonds is relatively more secure than investing than Stocks. For bond holders, most of the time, you only have to worry about your investment if the bond issuer defaults on its bond(interest payments on bonds or repaying principal amount at maturity) or declares bankruptcy. This normally does not happen for decent graded Bonds. Whereas, in stocks, you can virtually loose all your money(atleast on paper) if the stock price goes too low even if the company is solvent.

To search for and buy Bonds/CD, log into brokerage website and navigate to the trading section.




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