How does an individual investor go about buying Corporate bonds? I found one broker online, but they require a minimum balance of $25,000. Is there anyway for someone to open an account for any less ($5000-$10000)? Any help would be greatly appreciated!!Thanks, -- Eric
How does an individual investor go about buying Corporate bonds? I found one broker online, but they require a minimum balance of $25,000. Is there anyway for someone to open an account for any less ($5000-$10000)? Any help would be greatly appreciated!!TD Waterhouse offers bond trading, including coporates. You can open a new account with $2000, I believe. Some issues have minimum purchase requirements beyond this, though ($5000 face value, typically).
Numerous full service brokers in your area would also be willing to help you make a $5000+ purchase of corporate bonds.
Corporate bonds are normally issued in $1000 denominations. Municipal bonds are normally issued in $5000 denominations. You can buy one corporate bond for around $1000. With bonds, unlike stocks, there is not the advantage in using a discount broker. A full service broker will have a greater selection because you are not limited to exchange-listed bonds. Most corporate bonds are not exchange-listed. If you hold a corporate bond to maturity, which you should, many discount brokers will charge you a second commission. The full service brokers do not do that--the full face simply goes into your account. Best wishes, Chris
If you're looking for an online bond broker and bonds rated less than investment grade, E*Trade is easy to deal with, IMHO. No matter who you choose, be aware that prices are at the high end of the cycle.Also, be sure you buy your bonds the same careful way you buy the stocks you intend to hold as investments (rather than those for quick trades), namely with a though understanding of the company's fundamentals. Downgrades are rampent and even if your intention is to hold to maturity, serious prices declines - as opposed to normal noise - are discouraging and affect judgment.Charlie
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