Best bonds to buy in 2025

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eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.

Bonds, whether corporate or government, offer a better opportunity to reduce portfolio risks. Investing online —regardless of the type of asset you choose to invest in— is never risk-free, but bonds are considered more stable than stocks, especially government bonds. This guide highlights the best bonds to buy right now while also introducing you to a simple guide on buying financial assets.

What are the top bonds to buy?

The best bonds to trade this year offering a low expense ratio are:

1. The US Treasury Bonds

The United States treasury issues bonds and, so far, it has never been known to default, turning into a virtually risk-free long term investment. The US treasury bonds are divided into two broad categories:

• Treasury bills (T-Bills) with a maturity period of up to one year.
• Treasury bonds (T-Bonds) with a maturity of over 20 years.
• Treasury notes (T-Notes) with a maturity period between two and ten years with a fixed interest rate every six months.

You can choose the asset that suits your desired investment term and receive a fixed income.

2. Germany Government Bonds

Germany Government Bonds are among the most popular bonds traded globally due to the German economy’s stability over the years. German bonds have different names depending on their maturity period:

• Buxl is the ultra-long-term treasury bond
• Bund refers to the long-term bond offering
• Bobl is the medium-term bond offering
• Schatz refers to the short-term bond on offer by the German government

3. Vanguard Bonds

The Vanguard Bond offers two options that currently show positive annual yields. Vanguard High-Yield Corporate Investor, VWEHX, is made up of corporate bonds with more than 90% of them below investment grade. It is a high-risk bond fund with an expense ratio of 0.23% and a yearly yield that exceeds 3%.

Vanguard Intermediate-Term Tax-Exempt Investor, VWITX, is made up of a bond fund that includes over 11,000 municipal bonds. It has an expense ratio of 0.17% and an annual payout of 1%, but this goes up due to tax-exempts. You can also consider Vanguard ETFs as an alternative way to gain a similar exposure through Vanguard’s exchange-traded funds.

4. Fidelity US Bond Index

Fidelity offers a diversified bond fund boasting a 0.025% expense ratio and annual earnings that reach 1.1%. It is primarily made up of treasury bonds, investment-grade corporate bonds, and collateral-based mortgages.

The Fidelity US Bond Index, FXNAX, will thrive in any economic conditions with any interest rate since it is a bond fund with over 98% of investment-grade bonds. Some other investors choose Fidelity ETFs instead, which provide exposure to exchange-traded funds provided by Fidelity.

5. UK Government Bonds

Government bonds in the UK are known as gilts. A standard gilt issued by the UK government has the same characteristics as other bonds discussed above. The gilts are typically listed on the London Stock Exchange.

Where to buy the best bonds

One of the most common ways is to buy bonds is using a brokerage platform. In short, investing in bonds involves buying and adding them to your investment portfolio. This is done by directly purchasing either from the bond issuer or a bond ETF, an exchange-traded fund. Bond ETFs allow retail traders to buy and sell smaller lots and, hence, are more liquid.

Given the above parameters, these are the best brokers for trading bonds. These online investing platforms have been selected based on their regulatory status, fees, and unique features.

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Plus500

Min. Deposit $100

Fees From 2%

No. assets 2800+

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CFD service. 82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

This information is NOT relevant to EU residents who are to be serviced by EU subsidiaries of the Plus500 Group, such as Plus500CY Ltd, authorised by CySEC (Reg. 250/14). Different regulatory requirements apply in Europe such as leverage limitations and bonus restrictions.

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Public

Min. Deposit $20

Fees 1-2%

No. assets 9000+

Demo account No

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Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Public Crypto LLC. Crypto trading on Public platforms is served by Public Crypto LLC and offered through APEX Crypto. Please ensure that you fully understand the risks involved before trading.

How to Trade and Invest in Bonds

• Open a Trading Account: choose a broker that offers the bonds you’re interested in and click on the new account icon on their website. Fill in the required details and validate your new account via a link sent to your email or by following any other prompts. Provide documentation to comply with KYC norms and fund your account.
• Choose Bonds: bonds can be traded in two ways, through CFDs or ETFs. Decide on the approach that suits your investment goals and trading style. Select a bond you wish to trade by comparing its price history and returns. It is also important to select a bond according to your risk profile.
• Place Your Trade: once you’ve decided whether you are investing in ETFs or trading CFDs, pick the bonds you are interested in and start trading. Practise risk management and monitor carefully to adjust your position, if required.

What are bonds?

The simplest definition of a bond is an “I owe you” (IOU) document issued by a government or corporate institution to raise capital. IOU confirms the fact that a debt is owed as you lend your money for a specified period to the issuer of the bond. In return for buying a bond, the investor gets regular interest payments and the initial investment at the bond’s maturity date.

There are different types of bonds:

• Government bonds are issued by countries or government treasuries and are viewed as safe investments, especially if the issuing government is a major world economy.
• Corporate bonds are issued by individual corporations or companies and are considered riskier than government bonds. The degree of risk depends on the profile of the issuing company.
• Municipal bonds, also known as muni bonds, are issued by municipalities or states.
• Agency bonds are issued by government-affiliated institutions.

Why would a company issue bonds instead of borrowing money from an institution? In some cases, a corporation or government requires more investment than a single institution can fund. Bonds offer an avenue where such capital-intensive investments can be supported by many individual investors: all those who buy the bonds assume a lender’s role to that particular institution.

Another benefit is that the bonds are transferable to other investors if the current holder wishes to cash in before maturity. Trading bonds before maturity is why bond prices fluctuate, driven by demand and supply forces until the bond matures.

The coupon rate, which is the interest rate on a bond, is determined by credit rating and the maturity period. Corporations viewed as most likely to default due to low credit rating pay a higher coupon rate because of the higher risk. These bond types are known as high-yield bonds or junk bonds. They have a high probability of default, and hence, the investors demand a higher interest rate for their investment. Bonds that mature over a longer period also pay a higher coupon rate to cater for interest rate fluctuations and risks associated with inflation.

The best bonds to invest in, especially for the risk-averse, are investment-grade bonds. These are the bonds issued by stable world economies and other corporate institutions featuring excellent credit ratings.

What Are the Trading Hours for Bonds?

Investment instruments have different peak hours when they are traded around the world. For example, the New York Stock Exchange has two daily bond auctions, one from 4:00 A.M. (ET) and another core auction at 8:00 A.M. (ET). However, if the orders are not executed during these auctions, they are eligible for continuous trading afterwards.

Are bonds a good investment?

Bonds offer an alternative investment avenue that is less risky compared to trading shares or forex. Bonds are also more stable than individual corporate shares or the volatile forex market. All these factors combined make bonds a safer investment instrument that is easy to trade. Unlike other assets whose value depends on multiple factors, bonds are only affected by interest rates, making price predictions relatively easy.

When choosing the bond or bond fund, consider both your risk tolerance and finances. Always look at the yield figure of a bond: its total returns, interest rate, and bond expenses. Diversification is a good risk management strategy and can be practised while purchasing bonds.

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