How to Buy Bonds on E-Trade

Bonds are securities created by lending agreements in which an entity, such as a business or government, borrows money at agreed-upon terms including interest rate and bond maturity. You can easily buy bonds by opening a standard brokerage account online with E-Trade. Complete and submit the brokerage account application online; a minimum of $500 is required to fund the account. You can wire or transfer the funds to E-Trade by making a standard, one-time wire transfer or by setting up the account so that it is linked directly to a savings account.

Purchasing Bonds

Within your account, click on the "Bond Center" tab. If you already know which bond you want to buy, select the "Buy" option, and enter the number of bonds and its CUSIP number, which is akin to a ticker symbol for bonds. Prior to executing your trade, you can click on "Preview Quote Request" to verify your purchase price. Then click on "Place Order," after which E-Trade sends you a prompt confirming the transaction.

You can review bond purchases anytime by clicking on the "View Bond Orders" screen. You can also click on "Search Current Bond Offerings," which brings up a list of Treasury, corporate, agency and brokered CD bonds. The bond center is user-friendly and contains many prompts allowing you to obtain price information and CUSIP numbers and get bond quotes. Fees for buying bonds are $1 per bond. ETF transactions are $9.99 per trade and are effectuated the same way stocks are purchased by entering the number of shares you wish to purchase and the ticker symbol.

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