Our Top Picks

The best bond trading brokers, according to our research, are:

  1. DEGIRO
  2. Exante
  3. AvaTrade
  4. Saxo Bank
  5. Interactive Brokers
  6. FP Markets
  7. IG Markets

Among the factors we have taken into consideration to create this ranking are:

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

What are the best bond trading platforms?

Below is our handpicked list and review of the best bond trading platforms provided by online brokers, providing valuable insights into their distinct characteristics.

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.

 

  • 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.
Investing involves risk of loss
  • 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.
  • 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.
76% of retail investor accounts lose money
  • 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.
72% of retail investor accounts lose money
  • 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.
74-89% of retail CFD accounts lose money
  • 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.
74-89% of retail CFD accounts lose money
  • 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.
69% of retail CFD accounts lose money

How to choose a broker for bond investing

When diving into the world of bond investing, it’s crucial to select a broker that aligns with your investment goals. Here are some steps to guide you:

  • One of the most crucial aspects to consider is whether the broker is regulated. Brokers regulated by well-known financial watchdogs such as the FCA (Financial Conduct Authority), ASIC (Australian Securities and Investments Commission), NFA (National Futures Association), or CFTC (Commodity Futures Trading Commission) tend to be more trustworthy. This ensures that they adhere to stringent rules and provide a level of protection to their investors.
  • Different brokers have varying bond offerings. Some may offer bonds as Contract For Differences (CFDs) allowing traders to speculate on bond prices changes without owning the actual bond. Others may offer the actual bonds for purchase. Additionally, the range of available bonds may differ; not all brokers will provide every bond type on the market. Therefore, it’s essential to ensure that your chosen broker offers the specific bonds you’re interested in.
  • Just as with stocks and other securities, brokers charge fees for bond transactions. A good benchmark is to look for brokers that offer commissions on bonds below 1%. However, don’t forget to consider other potential costs, such as account maintenance fees or inactivity fees.

What are the types of bonds?

There are different types of bonds. Below is a summary list with a brief explanation of each.

  • Government Bonds: Issued by national governments, these are considered low-risk as they’re backed by the issuing country. They fund public projects and operations.
  • Municipal Bonds: Issued by state or local governments to fund projects like schools, hospitals, or infrastructure. Often tax-exempt.
  • Corporate Bonds: Issued by companies to raise capital for operations or expansion. Risk varies with the issuing company’s financial health.
  • Savings Bonds: Low-risk bonds issued by governments, typically purchased for future needs like education or retirement.
  • Agency Bonds: Issued by government-affiliated organizations, slightly riskier than government bonds but usually offer higher yields.
  • Zero-Coupon Bonds: Sold at a discount and redeemed at face value, with no regular interest payments.
  • Convertible Bonds: Corporate bonds that can be converted into a predetermined amount of the company’s stock.
  • Junk Bonds: High-risk, high-yield bonds issued by companies with lower credit ratings.
  • Inflation-Linked Bonds: Their value is adjusted with inflation, offering protection against inflation risk.
  • Foreign Bonds: Issued by a foreign government or corporation, denominated in the investor’s home currency.

Do you need a broker to buy bonds?

Bond investors require a broker to execute buy and sell orders. However, there are exceptions such as with government bonds which in some countries can be bought directly by citizens under specified conditions, bypassing brokers altogether.

So, for those looking to venture into more diverse bond investments, contacting a financial institution that operates as a broker is essential. These financial institutions are usually banks or funds.

Alternatively, one can open an account with dedicated bond brokerage firms. A popular example of such a firm is Interactive Brokers, known for its expansive bond offerings and competitive rates.

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.

Government bonds 10-YR Yield
Brazil 10,79%
Mexico 8,96%
India 7,19%
New Zealand 4,79%
United Kingdom 4,44%
Italy 4,26%
Australia 4,19%
United States 4,16%
South Korea 3,87%
Greece 3,81%
Canada 3,64%
Spain 3,64%
Portugal 3,29%
France 3,13%
Singapore 3,04%
Netherlands 2,93%
Germany 2,60%
Switzerland 1,00%
Japan 0,63%

*As per August 2023

How much can you earn on bonds?

In any case, the earnings on bonds depend on their yield. For instance, the average 10-year bond yield is 4% so, investing $100 will yield $4 in interest.

To know on average how much you can earn from a bond in a year, you need to divide the total yield by the number of years of the bond. For example, if you have a 10-yr bond with a yield of 10 percent, at the end of 10 years you will have earned an average of 1 percent per year.

Generally, the riskier a bond is, the higher the yield. Also, the gain may vary depending on when you liquidate the bond.

In other words, if you liquidate the bond before it matures (for example, by selling a 5-yr bond in its third year), you will earn less than if you wait until its natural maturity.

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.

Pros and cons of investing in bonds

Pros:

  • Good for long term investing
  • Low volatility

Cons:

  • The issuer may fail to repay the investor

filippo ucchino

About The Author

Filippo Ucchino
Co-Founder - CEO - Broker Expert
Filippo is the co-founder and CEO of InvestinGoal.com. He has 15 years of experience in the financial sector and forex in particular. He started his career as a forex trader in 2005 and then became interested in the whole fintech and crypto sector.
Over this time, he has developed an almost scientific approach to the analysis of brokers, their services, and offerings. In addition, he is an expert in Compliance and Security Policies for consumers protection in this sector.
With InvestinGoal, Filippo’s goal is to bring as much clarity as possible to help users navigate the world of online trading, forex, and cryptocurrencies.

Trading CFDs, FX, and cryptocurrencies involves a high degree of risk. All providers have a percentage of retail investor accounts that lose money when trading CFDs with their company. You should consider whether you can afford to take the high risk of losing your money and whether you understand how CFDs, FX, and cryptocurrencies work. Cryptocurrencies can widely fluctuate in prices and are not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Your capital is at risk. The present page is intended for teaching purposes only. It shall not be intended as operational advice for investments, nor as an invitation to public savings raising. Any real or simulated result shall represent no warranty as to possible future performances. The speculative activity in forex market, as well as in other markets, implies considerable economic risks; anyone who carries out speculative activity does it on its own responsibility.
ADVERTISER DISCLOSURE: InvestinGoal is completely free to use for all. Though we may receive a commission from brokers we feature, this does not impact the results of our reviews or rankings which are conducted with complete independence and objectivity, following our own impartial methodology. Help us continue to provide the best free broker reviews by opening your account with our links. Please read our Advertiser Disclosure to learn more.
2FC Financial Srl
Via Filippo Argelati, 10,
Milan, Italy
20143

VAT No. IT10004450960
Copyright © 2024 InvestinGoal.com – All rights reserved. / Privacy and Cookie Policy / Basic Terms of Use / Risk Warning / Sitemap