FROM OUR PARTNERS

Best Bond Brokers of 2022

Ashley Jackson

Want to start trading bonds? Set yourself up for success by selecting a broker that understands your needs. We’ve considered the best bond brokers based on commissions, account minimums, ease of use, and overall quality.

Trade a wide range of financial assets

$0 - $9.95

Fee Per Trade

$0

Account Minimum

Overview

Ally Invest offers competitive pricing on financial securities and robust research tools to help you make better-informed investment decisions.

What we like

  • Low cost commissions 
  • Wide selection of product offerings 
  • Up to $3,000 cash bonus
  • No minimum deposit required
  • Up to $75 for brokerage transfers

What we don't

  • Crypto not supported
  • Mutual fund fees

Get up to $625 when you open and fund an account

$0

Fee Per Trade

$0

Account Minimum

Overview

J.P. Morgan Self-Directed Investing offers beginners and seasoned investors free trades and a portfolio tool to help build out their asset allocation.

What we like

  • Unlimited trades with $0 commissions
  • No minimum investment
  • Manage investments from a mobile app
  • Portfolio builder tool to help with asset allocation
  • Access to research and insights

What we don't

  • Limited accounts, such as no SEP-IRA
  • No fractional share trading

INVESTMENT AND INSURANCE PRODUCTS ARE: NOT A DEPOSIT • NOT FDIC INSURED • NO BANK GUARANTEE • MAY LOSE VALUE

Copy investments from successful traders

$0

Fee Per Trade

$0

Account Minimum

Overview

eToro is a multi-asset platform that offers both investing in stocks, cryptocurrencies, and trading in CDF assets. It provides an innovative approach to ‘Social Trading,’ also known as ‘Copy Trading.’ Social trading allows users to connect, share their trades, and copy successful traders’ trades for potential gains.

What we like

  • Commission-free real stock trading
  • Offers money and risk management tools
  • A lot of learning materials available
  • Offers a free demo account
  • Copy successful traders investments

What we don't

  • Higher spreads and rollover fees
  • High non-trading fees

Discover new ideas from an active investing community

$0

Fee Per Trade

$0

Account Minimum

Overview

Public provides access to a powerful suite of tools, daily insights from millions of investors, and curated content and news, so all members can have the tools and resources needed to invest with context.

What we like

  • All-in-one investing platform 
  • Wide selection of product offerings 
  • Commission-free
  • Insights from an investing community of millions
  • Invest in any fractional asset
  • Live in-app shows about the markets

What we don't

  • Limited account types
  • No in-person customer support

Margin trading available with premium account

$0 - $9.95

Fee Per Trade

$0

Account Minimum

Overview

Axos Self-Directed Trading provides investors commission-free trades and an all-in-one solution for banking and investments.

What we like

  • Commission free trading on most assets 
  • Easy to use platform
  • Wide selection of product offerings 
  • No minimum deposit required
  • Extended market hours for premium accounts
  • Joint accounts available

What we don't

  • Crypto not supported
  • Premium account required for certain features
  • No in-person customer support

Offers fractional share trading

$0

Fee Per Trade

$0

Account Minimum

Overview

SoFi allows you to trade cryptocurrencies, stocks, and ETFs. It also uses the SIPC protection scheme and offers up to $500,000 in insurance coverage.

What we like

  • Free trading on ETFs and stocks
  • Offers fractional shares
  • A wide variety of cryptocurrencies
  • Free financial advice
  • No account minimum

What we don't

  • Does not offer mutual funds, bonds and options
  • Limited track record

What do bond brokers do?

Bond brokers help people invest in bonds. They are financial professionals who buy and sell debt securities, such as corporate and government bonds. A bond broker acts as an intermediary between buyers and sellers, helping them complete the sale. A bond broker can also help investors find out information about a particular bond, including its risks and rewards.

Why use bond brokers?

There are many reasons why you should use bond brokers to purchase your next bond:

  • Match your needs: Bond brokers have access to a wide range of investment products that can be difficult for individual investors to find on their own. Even if you have a good understanding of financial markets and markets in general, it can be challenging to identify specific types of bonds or other investments that meet your needs. For example, if you are looking for a municipal bond fund with low risk but high returns, it will be challenging to find one without help from a broker.
  • Accessibility: Bond brokers are available online and via phone, making them easy to contact anytime or at night. For some brokers, you can even get quotes for different types of bonds during off-hours when banks are not open for business.
  • Transparency: Bond brokers provide detailed information about each bond issue they offer to investors. This includes an explanation of how much interest it pays and how likely it is to default on its obligations. It also includes an estimate of how much the bond price will change based on changes in interest rates or other factors affecting its performance as an investment vehicle.

Are bond brokers safe?

Reputable bond brokers are safe. In addition, bond brokerage firms are regulated by various government agencies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). This means you can rest assured that your money is safe with them.

If you are looking for a bond broker, it is always better to go for an FCA-regulated broker.

What are the fees for bond brokers?

Bond brokers are the middlemen who earn their living by taking a cut of the transaction. There are two types of bond brokers: commission-based and fee-based. Commission-based brokers receive a percentage of your bond’s sale price, which can be as little as 1% or 5%. Fee-based brokers make money by charging you a flat fee for their services. However, there are some online bond brokers that don’t charge any fees.

What types of bond ETFs can you invest in?

ETFs are a great way to invest in bonds and will expose you to various bonds and funds. There are various types of bond ETFs:

  • Short-term bond ETFs: These funds invest in bonds that mature within one year or less. They’re designed to be more conservative than other bond funds and are often used as part of a portfolio that includes stocks and other fixed-income investments.
  • Intermediate-term bond ETFs: These funds invest in bonds that mature within two years to 10 years. Intermediate-term bond funds are often used by those who want to balance their portfolios between short-term and long-term investments.
  • Investment-grade bond ETFs: Investment grade bond ETFs are designed to track the performance of debt instruments with a credit rating of BBB or higher. These funds can be very attractive to investors who want to invest in bonds but don’t want to take on the risk associated with investing directly in high-yield debt.
  • High-yield bond ETFs: High-yield bond ETFs, also known as junk bond funds, are designed to track the performance of debt securities issued by companies with credit ratings below BBB. High-yield bonds tend to offer higher interest rates than investment-grade bonds because they carry more risk. These bonds can lose value quickly when interest rates rise or economic conditions deteriorate.
  • Total bond market ETFs: These funds invest in all types of bonds, including government, corporate and municipal bonds from around the world. They provide investors with broad exposure to the global bond market and perform well even when interest rates are low.

Benefits of Investing in bond ETFs

Here are some of the benefits of investing in EFTs with a bond broker:

  • Easier to manage: With a bond ETF, you don’t have to keep track of all the individual bonds that make up your portfolio. Instead, all the work is done by your broker. They’ll analyze which individual bonds make sense for your portfolio and buy those for you, which means less work for you.
  • Monthly dividends: Some bond ETFs pay out monthly dividends, which can be reinvested or taken as cash payments. This means that even if the price of the underlying bonds declines, you’ll still get paid every month.
  • Immediate diversification: Bond ETFs allow investors to quickly diversify their portfolios over multiple income streams and geographic regions without putting all their eggs in one basket, which can be particularly valuable when interest rates start rising again..

How to choose the best bond brokers

Here are some tips on how you can find the right broker for your needs:

  • Look for brokers with a track record of reliability: You can start by researching the reputation of the brokerage firm and its brokers. Look for reviews from other customers and any awards or recognition the company has received.
  • Find someone who truly specializes in bonds: Bond brokers can help investors get started with their portfolios or make adjustments to their existing portfolios based on changing market conditions. A good bond broker will have extensive knowledge about all aspects of bonds, including corporate and municipal debt instruments and treasuries. They should also have experience in foreign markets and be familiar with futures contracts and options trading.
  • Know a dealer’s limitations: Not all brokers are willing or able to sell all types of bonds or other securities. Make sure that yours is qualified to handle whatever you want to invest in before asking them for advice or assistance.
  • Watch out for account fees: Fees vary widely among brokerages and can be charged on different accounts, including regular and retirement accounts. Be sure you understand all fees before signing up for an account with any company.
  • Consider tools, education, and features: Most brokers offer trading platforms that allow you to place trades electronically or over the phone with a live representative. Some firms have better mobile apps than others, while others may offer online chat services where you can communicate directly with a person rather than send an email through their website interface.