How to invest in bonds?

Written by
Fact checked by
Updated
Feb 2024

Bonds are preferred by buy-and-hold investors or those getting close to retirement, who value relative safety and price stability and are content with lower returns than what stocks may offer over the long term. Bonds also serve as a key component of the investment portfolios of pension funds and life insurance providers, among others.

Some bonds are indexed to the consumer price index (CPI) and can be used as a hedge against inflation. For example, the Treasury Inflation-Protected Securities (TIPS) issued by the US Treasury are linked to US inflation. Similar products exist in the UK, Canada, India, Italy and Hungary, among many other countries.

For the actual process of buying bonds, please refer to our article “How to buy bonds?”

📈 Are you worried about inflation and its potential impact on your investments? Our Inflation page is here to help! Learn how inflation can impact your investments and discover practical ways to protect them with our beginner's guide to inflation.

What else do you need to know about bonds?

Want to learn more before deciding what’s your optimal bond allocation? You might want to check out these other articles to deepen your knowledge.

 

 

Got questions?
Engage with our growing community of traders and investors like you to find your answers.
Join now

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology.

author image
Balázs Szládek
Author of this article
I have 20+ years of hands-on experience as a business journalist, researcher, copy editor and translator covering topics including general news, economic policy, politics and energy markets. I enjoy the challenge of explaining difficult subjects in plain English, helping would-be investors navigate the field of financial markets. I hold a master's degree in American Studies and Political Science.
×
I'd like to trade with...