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| Welcome to Schwab | Investment Products | Research & Strategies | Advice & Retirement | Active Trading | Banking & Lending |
|
Call us at 866-232-9890Send us an email |
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For investors searching for a higher yield than normally available in the government market, corporate bonds offer a more aggressive fixed-income choice. What are corporate bonds?
| Benefits of corporate bonds
| Minimum investment
| Low commission electronic trades
| Why buy corporate bonds at Schwab?
What are corporate bonds? Corporate bonds are debt obligations issued by corporations as an alternative to issuing stock when raising capital. The corporation promises to repay the loan at a specified future date and makes semi-annual interest payments to the investor at a fixed rate. Because bonds are senior to stock, interest and principal are paid to bondholders before dividends are paid to stockholders. Return to top Benefits of corporate bondsWhether you're purchasing corporate bonds to diversify your portfolio or buying them because your investment strategy calls for higher returns than Treasuries offer, you can take advantage of: High returns Corporate bonds offer higher yields than Treasury bonds of similar maturities and may be appropriate for investors who are willing to trade off some security for potentially higher returns. Usually, bonds with higher yields have lower credit ratings. And some bonds are callable, which limits your ability to lock in the high yield for the full term. Dependable income Corporate bonds pay interest semi-annually until maturity or until they are called. You know when to expect your payments and how much they'll be. Diversification Many people buy bonds to diversify their portfolios. And because there are so many different corporate bonds, you can structure your portfolio according to your particular investment strategy. Of course, your mix of bonds and stock will depend on your investment objectives. Flexibility Choose from a wide range of corporate bonds—from specific industries to particular coupons, maturities and ratings. Liquidity If you need cash you can sell your bonds any time prior to maturity in the secondary market. Some bonds trade more actively than others and may be easier to sell. Because bond prices and interest rates move in opposite directions, you may receive more or less than your original investment if you sell. Of course, if you hold your corporate bond until maturity, the issuer promises to pay back the full face value. Return to top Minimum investment$1,000 Return to top Low commission electronic tradesMake your next listed corporate bond trade on the Web for only $2.00 per bond. Return to top Why buy corporate bonds at Schwab?As a broker, Schwab can offer you a wide choice of listed and OTC bonds with different ratings and maturities. For details on how easy it is to invest in corporate bonds at Schwab, call a Schwab Bond Specialist™ at 888-621-4355. Return to top (0406-6456) |
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New to Schwab?
Call 866-855-9104 to learn about fixed-income investing. Already a Schwab client? Call 888-621-4355 to talk to a Schwab fixed-income specialist. You may also be interested in:
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