Top 7 Best Bond Trading Brokers 2023

In this article, we have grouped the best platforms for investing in bonds.

Among the factors we have taken into consideration are:

• The fees charged on bonds
• The total number of bonds to invest in
• The overall quality of the trading platform

Summary

1. DEGIRO: best platform for investing in bonds
2. Exante: professional platform for bonds
3. AvaTrade: fixed spread broker on bonds
4. Saxo Bank: low commissions on bonds
5. Interactive Brokers: best for bond trading
6. FP Markets: best MetaTrader platform for bonds
7. IG Markets: for investing in bonds in CFDs

WARNING

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
Between 74-89% of retail investor accounts lose money when trading CFDs.
You should consider whether you can afford to take the high risk of losing your money

Review

1. DEGIRO

• On DEGIRO you can trade over 50 bonds on European stock exchanges.
• Commissions are very competitive and start at €2 per order, plus a €1 management fee.
• Bonds on DEGIRO are offered through the broker’s proprietary platform.
• To invest in bonds on DEGIRO you must open an account with a minimum deposit of at least €0.01.

Visit DEGIRO
(Investing involves risk of loss)

2. Exante

• Exante is a broker that focuses on providing B2B services.
• On Exante you can find EU, EMEA, U.S. government, and corporate bonds, as well as exotics.
• Commissions are low and start at 9 pips on bonds.
• Opening an account on Exante requires a minimum deposit starting at €10,000, while €5,000 is required to open a corporate account.

Visit Exante
(74-89% retail investor accounts lose money)

3. AvaTrade

• AvaTrade offers the ability to trade U.S., European and Japanese bonds.
• Commissions on Avatrade are charged through a fixed spread.
• Avatrade offers bonds as CFDs, and therefore allows its users to use leverage of up to 1:5.
• Bonds on AvaTrade are offered on the MT5 platform, which you can try out with a free account.

Visit AvaTrade
(79% of retail CFD accounts lose money)

4. Saxo Bank

• Saxo Bank offers very competitive commissions for those interested in trading bonds.
• Bond commissions on Saxo Bank start at 0.05% for the most active traders, rising to a maximum of 0.2%.
• Saxo Bank allows you to invest in European, U.S., and other bonds exposed to different sectors such as emerging markets.

Visit Saxo Bank
(72% of retail CFD accounts lose money)

5. Interactive Brokers

• With Interactive Brokers you can trade U.S., European, and Hong Kong bonds.
• Commissions on Interactive Brokers bonds start at 0.1 percent on the transaction (down) depending on the bond selected and the volume of the trade.
• Bonds on Interactive Brokers are traded on the IBKR platform.
• A minimum deposit of $200 is required to open a real account on Interactive Brokers.

Visit Interactive Brokers
(74-89% of retail CFD accounts lose money)

6. FP Markets

• FP Markets allows bonds to be traded through MT4 and MT5.
• On FP Markets, bonds are traded as CFDs.
• FP Markets offers several bonds, including US bonds and UK bonds.
• Opening an FP Markets account requires a minimum deposit of $100, but you can try the service with a demo account.

Visit FP Markets
(74-89% of retail CFD accounts lose money)

7. IG Markets

• With IG Markets you can also trade fractions of a bond contract.
• Trading on IG is done through CFDs.
• The only commission charged by IG on bonds is the spread, and it starts at 1 pip.
• In all you will be able to trade 12 bonds, including U.S., Japanese and other bonds.
• Opening an IG account requires a minimum deposit of $300.

Visit IG Markets
(76% of retail investor accounts lose money)

What are the most profitable bonds?

Taking the major 10-year government bonds into consideration, Brazilian bonds are currently the most profitable.

Generally, the bonds that yield the most are the ones that require more risk on the part of the investor. The more stable the underlying of a bond, the more certain one is that the bond will be repaid, and thus the lower the yield.

Consequently, one must consider that bond yields are not fixed, but vary according to interest rates that are often derived from the macroeconomic and geopolitical situation of the issuer.

*Oct 2022

Pros and cons of investing in bonds

The main advantage of investing in bonds is the ability to predict returns over the long term. However, the main problem with bonds is the risk that the issuer will fail to repay the investor.

To limit this risk, it is possible to invest in government bonds, as the country would have to go into default to fail to repay the interest on its bond.

When it comes to corporate bonds, on the other hand, the risk is higher because the chance of the company going bankrupt is much higher than the scenario of a government default.

How much can you earn on bonds?

On average, 10-year bonds yield around 4 percent, meaning that for every $10,000 invested, you can get a return of up to $400 on interest. However, the riskier a bond is the higher its returns.

The return can be higher or lower if you liquidate the bond before its natural maturity.

For example, if the cost of the bond increases by 5 percent during its 10-year term, the investor may decide to liquidate his position by earning $500 and foregoing the total interest.

Useful resources for investing in bonds

Bloomberg is one of the leading portals for those who want to monitor the bond market. In addition to providing useful news, with Bloomberg, you can get a daily, up-to-date overview of global bond market performance.

For insight into bond ratings, there is Morningstar, which is a free service that provides professional insights into financial markets. Although the basic information is there for free, to get in-depth bond insights and ratings, a subscription fee is required.

A similar alternative to Morningstar is Yahoo Finance, which in addition to offering market insights, also offers a convenient news section to monitor the bond market.