How to Trade Fixed Income Securities in Your Fidelity Account - Fidelity

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Mutual Funds and Mutual Fund Investing - Fidelity Investments

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How to Trade Fixed Income Securities in Your Account

Investing in fixed income securities is one way to add diversity in your portfolio. Fidelity offers a wide range of bonds, CDs, and bond funds. Plus, we have the tools and expertise to help you build a strong strategy. .

What do I need to know

Fixed income investments generally pay a return on a fixed schedule (with the exception of bond funds), though the amount of the payments can vary. Individual bonds may be the best known type of fixed income security, but the category also includes bond funds, ETFs, CDs, and money market funds. Fidelity offers a wide range of tools to help you trade fixed income securities. . It's important to understand the risks that go hand-in-hand with fixed income products. These include: Interest rate risks: As interest rates rise, bond prices usually fall, and vice versa. Credit and/or default risks: Issuers could have bonds downgraded and/or be unable to pay interest or principal. Call risks: Issuers may redeem bonds before they mature, which means you will not receive all of your interest payments, and you might need to reinvest and possibly receive lower interest rates. Liquidity risks: If an issue is small and/or there are not many buyers, it might be hard to sell. Other pre-payment risks: Some fixed income securities have options which may be exercised by the issuer or the borrower, ultimately affecting future interest payments. Some types of accounts aren't eligible to trade fixed income products (with the exception of bond and money market funds). These include 529 plans, standalone mutual fund accounts, and cash management accounts. Note: Trusts, investment clubs, non-prototypes, etc. may impose their own restrictions, but it's up to the customer to adhere to those restrictions. Before you get started you’ll need to decide which type of fixed income investment is right for you. Take the time to get familiar with the various fixed income products we offer, including:

What to expect

There are a few ways you can participate in fixed income markets. You can: Buy a money market or bond fund. Buy or sell secondary market fixed income offerings. Submit buy orders for New Issue Treasury, CD, GSE/Agency, and Corporate NotesSM inventory. Submit an indication of interest to purchase new issue municipal bonds. Buy ETFs on an exchange during the market day. To trade bonds, CDs, money market or bond funds, enter the quantities as follows (please use numbers only; no dollar signs or commas): Bonds and CDs, enter the number of bonds to trade in increments of 1 bond, where 1 bond/CD is equal to $1,000 (e.g., to invest $10,000 on a bond trading for $1,000 per bond, enter the trade for 10 bonds). Bond funds usually have an initial order minimum of $1,000 to $10,000 (depending on the fund). When your order is completed, you'll receive a trade confirm and under Order Status, you'll see that the trade was executed. Please wait while Fidelity's Virtual Assistant loads.

Questions

* In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible. † Fidelity's Virtual Assistant uses advanced technology and artificial intelligence to help with frequently asked questions and to enhance your digital experience. It is designed to be both anticipatory and responsive based on your search terms, information you enter in reply to the Virtual Assistant's questions, and your account and other information on file with Fidelity. Fidelity does not guarantee accuracy of the Virtual Assistant's responses or alignment of its suggestions with your intended purpose. The Virtual Assistant does not recommend the purchase or sale of specific securities or digital assets. While it may offer educational information, it does not have the capability to discern what investment choices would be suitable for your personal situation. Do not attempt to place trade orders through the Virtual Assistant; it can provide you with guidance as to how to place a trade at Fidelity, but the Virtual Assistant cannot execute trades on your behalf. Any personal, account or other information you provide to the Virtual Assistant, as well as all search information entered, may be retained, accessible to Fidelity personnel, and used and shared consistent with Fidelity's Privacy Policy. Notwithstanding, you should not provide the Virtual Assistant with credit or debit card information or protected health information. 715614.1.0

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