What are the costs?

Low, straightforward pricing*

New bond issues



(new issues and secondary trades)

$0 online

Secondary trades

  • Corporate bonds
  • Municipal bonds
  • Government agencies
  • Zero-coupon Treasuries
    (including STRIPS)

$1 per bond online

$10 min./$250 max. online*

Broker-assisted trades

Online pricing plus $25/trade

Large-block transactions (orders of more than 250 bonds) may be eligible for special handling and pricing. Please call us at 800-626-4600 for information (Monday–Friday, 8:30 a.m.–6:00 p.m. ET).

*Schwab reserves the right to act as principal on any fixed income transaction, public offering or securities transaction. When Schwab acts as principal, the bond price includes our transaction fee (outlined above) and may also include a markup that reflects the bid-ask spread and is not subject to a minimum or maximum. When trading as principal, Schwab may also be holding the security in its own account prior to selling it to you and, therefore, may make (or lose) money depending on whether the price of the security has risen or fallen while Schwab has held it. When Schwab acts as agent, a commission will be charged on the transaction.

The fundamentals of bond pricing.

  • Find the best price.

    The same bond can be offered at different prices. Schwab simplifies the search by automatically presenting you with the lowest price available to us from over 200 dealers.1

  • Maximize your return potential.

    Because the yield you earn on a bond is impacted by what you pay for it, shopping around for the lowest price and transaction fees can help you potentially increase your return on a bond without adding risk.

Compare price against yield.

Hypothetical bond: 4% interest, 10-year maturity

Dealer A B C
Price $100.00 $100.50 $101.25
Yield to Maturity 4.00% 3.94% 3.85%

Source: Schwab Center for Financial Research and Bloomberg. Assumes semi-annual coupon payments. For illustrative purposes only.

Learn More About Pricing in Buying and Selling Bonds

Schwab tip: Ask the right questions—it could save you money.

  • Bonds are often quoted with a number of cost components bundled together, making it difficult to know what you're actually paying for each component. So it's important to understand any commissions or transaction fee built into the price (and indirectly the yield), as well as any additional fees.

  • Be sure to ask these questions:

    • How much am I paying in commission or transaction fee on this bond?
    • Do you have a standard transaction fee schedule for bonds, or does the transaction fee vary?
    • How much am I being charged in management fees?

A broad range of individual bond choices, not just our own.

Through Schwab BondSource, you can access over 60,000 bonds from more than 200 dealers, including new-issue municipal and corporate bonds.1

  • Treasury bonds

    The U.S. government issues Treasuries to pay for operations and fund the national debt.

  • Corporate bonds

    Issued by corporations, these bonds generally offer higher yields (with greater risk) than government bonds.

  • Municipal bonds

    These are debt securities that are issued by states, cities, counties, and public enterprises to finance government projects and other expenditures. Municipal bonds are usually exempt from federal and state taxes if you purchase them from issuers in your home state.

  • Agency bonds

    Agency bonds are issued by government-sponsored or government-owned enterprises such as the Government National Mortgage Association (GNMA) or Federal National Mortgage Association (FNMA).

  • Mortgage-backed securities

    Secured by real estate loans, these investments make payments to investors from the interest and principal paid on the underlying mortgages.

Help when you need it.

Whether you prefer one-on-one help from a Fixed Income Specialist or want to invest on your own, Schwab offers the resources to guide you along the way.

  • Work directly with a Fixed Income Specialist.

    Our specialists can provide you with a strategy that's specific to you and your goals. Learn more about Fixed Income Specialists.

  • Learn from experts at the Schwab Center for Financial Research.

    Stay at the forefront of modern investing with Kathy A. Jones, Senior Vice President and Chief Fixed Income Strategist, Schwab Center for Financial Research.

  • Attend a workshop

    Find a workshop of interest to you at your nearest branch.

Find and manage fixed income investments.

Streamline your search for fixed income investments and simplify managing your trade decisions and portfolio with our easy-to-use fixed income resources.

New to bonds?

Investors often overlook bonds because they're more familiar with stocks. To understand bonds, start by understanding how they differ from stocks.

What exactly is a bond?

Both stocks and bonds are issued as a way to raise money. The difference is this: When you purchase stock, you become one of the company's owners. When you invest in a bond, you are one of the company's lenders. So you can think of a bond as an IOU, because that's what it is–a promise to pay back the money you've loaned, with interest.

Primary differences between stocks and bonds
  Stocks Bonds
Investment Objective For growth and to outpace inflation. For stability, diversification, and income.
Risk Higher. Principal values can be volatile. In the case of bankruptcy liquidation, stockholders receive their payment after bondholders and other creditors. Lower. Principal value is generally less volatile than stock prices. However, all bonds are susceptible to interest rate risk, credit risk, and default risk.
Income Some pay quarterly and special dividends. Most pay a fixed amount of income to holders each year.
Ownership Ownership in the company. Depending on stock type, shareholders could have voting rights. No ownership. Bondholders do not have voting rights.
Trading Trade through a centralized exchange, which consists of competing buyers and sellers. Most bonds trade over-the-counter (OTC)—that is, between bond dealers without the use of a centralized exchange.
Return of Principal Stocks do not promise to return principal. Most bonds promise to return principal on a stated maturity date.

How bonds are paid out.

$30,000 Bond face value


5% Bond interest (coupon) rate


$1,500 Annual interest payment
($750 Semiannual payments)

Helpful terms

Face value: A bond's face value is the amount the issuer is obligated to pay back when the bond matures. For most bonds, the face value is $1,000 and never changes.

Interest rate: Sometimes called the "coupon rate," this is the percentage of the bond's value the issuer agrees to pay the bondholder each year. Interest rates can be either fixed or variable, and most bonds pay interest twice a year.

Maturity date: This is the date on which the issuer has promised to pay back the face value of the bond. Maturities can range from a few weeks to 30 years or more. For some bonds, the issuer reserves the option to pay off the bond before the maturity date. These are referred to as "callable" bonds.

Primary market: This is where newly issued securities are sold. When you buy a new issue in the primary market, you pay the new-issue offering price, which is the same for all buyers.

Secondary market: This is where previously issued bonds are traded between dealers and investors, including institutions. Bond prices are allowed to float at prices set by the market.

Yield to maturity: This is the bond's expected annual rate of return if you hold it to maturity. It includes interest payments and reflects any gain or loss you may realize if you purchase.

View glossary of more helpful terms >

Consider bond laddering to balance between income and risk.

A bond ladder is a portfolio of individual bonds with different maturity dates. The staggered maturity dates help reduce risk if interest rates fluctuate. And since many bonds generally pay out twice a year on dates that coincide with their maturity date, monthly bond income can be structured around those dates.

Learn More About How Bond Ladders Work

Who issues bonds?

While stocks are issued exclusively by companies, bonds are issued by both public and private entities. Cities, states, the federal government, government agencies, and corporations issue bonds to raise capital for a variety of purposes, such as building roads, improving schools, opening new factories, and buying the latest technology.

How do bond rates and yields work?

The return (yield) you're quoted when you buy a bond is often different from the interest it pays. Why? Because in addition to the annual interest rate, the bond's return reflects any difference between its purchase price and its face value—the amount you're expected to receive when the bond matures.

  • If you buy the bond at a price higher than the face value (at a premium), you'll receive less than you paid when the bond matures.
  • If you buy the bond at a price lower than the face value (at a discount), you'll receive more than you paid.
  • If you sell the bond before it matures, you get its current price, which may be higher or lower than the amount you originally paid.

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Clients of independent investment advisors: You may also contact your advisor or call Schwab Alliance at 800-515-2157.