Bond - Buying Guide

To evaluate a bond investment effectively, you must understand its primary features:

: The specific future date when the issuer must return the bond's face value to the investor. bond buying guide

: Issued by companies to fund operations. These range from "investment-grade" bonds (higher credit quality) to "high-yield" or "junk" bonds, which offer higher interest rates to compensate for a greater risk of default. To evaluate a bond investment effectively, you must

: Debt issued by government-affiliated organizations like Fannie Mae or Freddie Mac. Choosing Between Individual Bonds and Funds Investors generally have two paths to entry: Bonds versus bond funds - Vanguard for Advisors Their primary advantage is that interest is often

: The fixed annual interest rate the issuer pays the bondholder.

: Issued by states or cities to fund public projects. Their primary advantage is that interest is often exempt from federal—and sometimes state—income taxes.

: The amount the issuer agrees to pay back when the bond matures, typically in multiples of $1,000.