Fixed Income Brokers Commissions (2022)


Online brokerage firms for buying fixed income investments (U.S. Treasuries at auction, T-Bills, Notes, corporate bonds, munis): fees, platforms, and ratings.



Brokers Fixed Income Fees Comparison


Broker Rating Broker Bonds Fee Corpo
rate
Munic
ipal
New Account Promotion
Ally Invest
Ally Invest rating

$1 per bond with $10 minimum, $250 maximumYesYes Up to $3,000 cash bonus + $0 commission trades.
TD Ameritrade
TD Ameritrade rating

Treasuries at auction: $25. All other bonds on a net yield basisYesYes$0 commissions + transfer fee reimbursement.
Charles Schwab
Charles Schwab rating

$1 per bond, $10 minimum, $250 maximumYesYesGet commission-free online stock trades.
Cobra Trading
Cobra Trading rating

NANANANone
Etrade
Etrade rating

$1 per bond, minimum $10, maximum $250YesYes Get zero commission on stock and ETF trades.
Fidelity
Fidelity Investments rating

$1 per bond, $250 maximum; $50 maximum if maturing in one yearYesYesGet $0 stock commissions.
Firstrade
Firstrade rating

On a net yield basisYesYesGet 2 FREE stocks and $0 commission in ALL trades!
Interactive Brokers
Interactive Brokers rating

0.1%* Face Value (10 bps) if <= $10,000 Face Value; 0.025%* Face Value (2.5 bps) if > $10,000 Face ValueYesYesUse this referral link to get up to $1,000 of IBKR stock for free!
Merrill Edge
Merrill Edge rating

On a net yield basisYesYesNone
Muriel Siebert
Muriel Siebert rating

100 bonds or more - $2.50 per bond, from 50-99 bonds - $3 per bond, up to 49 bonds - $3.50 per bond; $35 minimum commission for listed corporate bondsYesYesNone
Robinhood
Robinhood Trading rating

NANANAGet one FREE stock when you open an account.
Sogotrade
Sogotrade rating

NANANANone
TIAA
TIAA brokerage rating

$14.95 + $5 per bondYesYesNone
TradeStation
Tradestation rating

$14.95 + $5 per bondYesYes $150 cash bonus when you transfer funds into TradeStation.
Vanguard
Vanguard rating

On a net yield basisYesYesNone
Webull
WeBull rating

NANANA 6 FREE stocks valued $34-$12,600 give-away at Webull.
Wellstrade
Wellstrade rating

$50 per transactionYesYesNone

  * NA means Not Available.


Overview of Bond Trading With Online Brokerage Firms


Investors who are interested in trading fixed-income investments have special needs that may not apply to other traders. They especially need a brokerage firm that offers bond research tools, customer service associates who specialize in trading debt, and other fixed-income features. Not all broker-dealers offer these services, and some brokers offer a smaller range of debt than other firms.


Fixed-Income Commission Schedules


Commission schedules for bonds and other fixed-income assets can vary widely from one broker to the next. Obviously, if you’re going to trade bonds, you want to find a broker with a competitive pricing schedule.

Some brokers charge a flat fee for U.S. Treasury bonds, while other firms will add a markup or markdown to the price of the bond. This means the bond will be more expensive (markup) on the buy side, and a little cheaper (markdown) when you’re selling it. This spread is the broker’s compensation for providing the trading service.

WellsTrade customers pay $50 for all Treasury obligations: bills, notes, and bonds. This commission is applied on both the buy and sell side. All other debt securities are charged on a markup/markdown basis.

Investors at TD Ameritrade pay only $25 for Treasury securities. Other debt instruments are priced on a net yield basis, which means there is a markup or markdown.

A recent study on fixed-income prices by Corporate Insight found that Fidelity charged $13.95 less per bond trade than three of its competitors. That’s how much a markup or markdown can be.

Many brokers impose purchase minimums on fixed-income products. At TD Ameritrade, for example, bonds and collateralized mortgage obligations have a five item minimum, which is a $5,000 minimum. Certificates of deposit have a $2,000 minimum.

Some brokers impose minimum or maximum commissions for fixed-income trades. Ally Invest, for example, has a $10 minimum. Fidelity has a $250 maximum, or $50 for bonds that mature in less than 12 months.


Fixed income broker


Range of Offerings


Oftentimes, when you buy and sell bonds at a broker-dealer, the firm is the counter-party. This means that you buy from the brokerage and sell back to it. Technically, the firm acts as a dealer in these cases rather than a broker.

If you’re buying from a brokerage firm, you obviously want to be sure the company has a good range of products. Bigger firms are more likely to have a wide range of securities and a large inventory. Typically, the range of products (corporate bonds, UIT’s, and municipal debt, for example) is displayed on the broker’s website, but the depth of products is not.

Merrill Edge offers all U.S. Treasury obligations, along with agency debt, zero coupon bonds (including corporate, government, and agency), munis, and brokered CD’s. This is a very sizeable range.

By contrast, Robinhood and Webull offer no fixed-income products at all. Firstrade provides access to STRIPS, a unique financial instrument created by the brokerage firm by stripping off principal and bond coupons from a debt security.


Fixed income broker commissions


Fixed-Income Customer Service


Another important feature that bond traders should look for in a broker is dedicated fixed-income customer service. Some brokers have representatives who specialize in bond trading. Vanguard, for example, has debt specialists available over the phone from 8 am until 6:30 pm, EST, during the week.


Fixed-Income Research & Education


It’s important to have the necessary resources to study bonds, so this category is important, even for seasoned investors. Brokerage firms often differ widely in the learning materials they do or do not provide their clients. Bond investing is not an exceptional case. Some brokers provide thorough resources for debt investors, while other brokerage websites have almost nothing of value to debt traders.

As one example, the WellsTrade site has very little information on bond trading. There are no instructional videos or informational articles. If you need some extra guidance in your fixed-income trading, obviously this broker wouldn’t be a very wise choice.

WellsTrade does provide a bond screener. It is able to scan thousands of bonds based on a range of criteria, including yield, ratings, maturity, and more.

Fidelity’s website hosts many videos, articles, and webinars that cover a wide range of bond topics. For example, one article discusses the importance of interest rates for fixed-income investors, while a webinar looks at the municipal bond market. Investors who are new to the world of bond trading would obviously be better served at Fidelity than WellsTrade.

In addition to the broker’s learning materials, Fidelity also provides an advanced screener with over 80,000 debt instruments.


Fixed-Income Trading Tools


If you’re going to buy and sell bonds, you want a broker that has good trading tools for fixed-income. The WellsTrade site does not provide any trading technology for bond trades. Instead, clients must call the firm to place a fixed-income trade.

Schwab, by comparison, provides a fairly straightforward trading ticket that can be used to place orders for many different varieties of debt, including Treasuries, munis, and corporate securities. Some bonds can only be purchased by calling the broker.

Fixed-income usually cannot be traded on mobile apps or desktop platforms, although Interactive Brokers does have a bond platform.


Fixed-Income Funds


Buying and selling funds that hold bonds is an alternative way to make fixed-income investments. Like the other categories, there can be a wide variation from broker to broker regarding bond fund offerings. Vanguard, for example, offers 2,189 bond funds, while Merrill Edge clients have access to just 1,179.


Fixed Income Brokers Recap


Bond-trading services vary widely from one brokerage firm to another. Doing some research before placing a trade can help you find the best broker for your trading needs. A broker’s website and its bond trading desk are both good places to start.


About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.