Bonds typically pay a predefined schedule of fixed interest payments, and promise to return your money on a specific maturity date (provided the issuer does not default).
Reasons to consider:
- You have the time and investment knowledge required to research and select which bonds to buy, monitor your portfolio for credit quality changes, watch for called or maturing bonds, and reinvest proceeds when principal is returned.
- You'd like a predefined schedule of interest payments.
- You can leave your money invested until maturity, or when called.
- You have enough money to diversify. When you purchase individual corporate or municipal bonds, Schwab recommends that you have at least $50,000 to invest across a minimum of 10 issuers for adequate diversification by issuer and maturity.