The basic steps to buy bonds on Fidelity

To buy a bond on Fidelity, log into your account, navigate to the Trade tab, select Fixed Income, then Bonds, and search for the specific bond you want by its CUSIP number or issuer name. Once you find it, enter the quantity and price you're willing to pay, review the order, and submit it. The bond will settle in your account after the trade clears, typically within one to three business days depending on the bond type.

Fidelity offers access to thousands of individual bonds — Treasury bonds, municipal bonds, corporate bonds, and agency bonds. You can also buy bond funds or bond ETFs if you prefer a diversified basket rather than individual securities. The process differs slightly depending on which type you choose, but the entry point is always the Trade section of your account.

Before you place an order, you need to know what you're looking for. Bonds are identified by a CUSIP number (a nine-character code), and knowing this number makes the search faster and more precise. If you don't have the CUSIP, you can search by the issuer's name, the bond's maturity date, or its coupon rate, though results will be broader.

Key Takeaways

  • Individual bonds on Fidelity are bought through the Trade tab under Fixed Income, and you search by CUSIP number, issuer name, or bond characteristics.
  • Fidelity charges a transaction fee for most individual bond trades, which varies by bond type and is deducted from your purchase price or added to your sale proceeds.
  • Treasury bonds have no transaction fee on Fidelity, while corporate and municipal bonds typically carry a markup or commission built into the price you see.
  • Bonds settle within one to three business days, and you can hold them to maturity or sell them before maturity through Fidelity's secondary market.
  • You can also buy bond mutual funds or ETFs on Fidelity without transaction fees if you prefer not to pick individual bonds.

Understanding Fidelity's bond transaction costs

Fidelity does not charge an explicit per-trade commission on most bonds, but the cost is built into the price you pay. When you buy a bond, Fidelity adds a markup to the wholesale price; when you sell, they take a markdown. This markup or markdown is the firm's compensation and is not shown as a separate line item — it's embedded in the bond's price on your screen.

Treasury bonds are an exception: Fidelity charges no markup on direct Treasury purchases. This is one reason Treasury bonds are often the lowest-cost entry point for new bond investors on the platform. Corporate bonds and municipal bonds typically carry markups ranging from 0.5% to 2% of the bond's face value, depending on the bond's liquidity and type. Less liquid bonds — those that trade infrequently — tend to have wider markups.

Before you confirm a bond purchase, Fidelity shows you the estimated cost, including any markup. Review this figure carefully, because it directly reduces your return. If the markup seems high, you can search for a different bond with similar characteristics that may have a tighter price.

How to search for and select a specific bond

Start by clicking the Trade tab in your Fidelity account, then select Fixed Income from the menu. Choose Bonds to open the bond search tool. You'll see a search box and filter options for bond type, maturity date, coupon rate, and credit rating.

If you know the bond's CUSIP number, enter it directly into the search box — this is the fastest way to find an exact bond. If you don't have the CUSIP, use the filters to narrow results. For example, if you want a corporate bond maturing in five years with an investment-grade rating, set those filters and Fidelity will display matching bonds with their current bid and ask prices.

Each bond listing shows the issuer name, coupon rate (the interest rate the bond pays), maturity date, current price, and yield to maturity (YTM). The YTM is the total return you'll receive if you hold the bond until it matures, accounting for the price you pay today. Compare YTM across similar bonds to see which offers better value. Once you've selected a bond, click on it to see more details, including the bond's credit rating, call features (if any), and trading history.

Placing and confirming your bond order

After you select a bond, click Buy to open the order ticket. Enter the quantity — bonds are typically sold in increments of $1,000 face value, so if you want to invest $5,000, you'd enter 5. Fidelity will show you the current ask price (the price sellers are asking) and calculate the total cost, including any markup.

You can place a market order, which executes at the current ask price when ready, or a limit order, which only executes if the bond reaches a price you specify. For bonds, limit orders are common because bond prices fluctuate throughout the day and you may want to wait for a better price. If you use a limit order, set your limit price and an expiration date — typically Good for Day (GFD) or Good Until Canceled (GTC).

Review the order summary carefully. It will show the bond's CUSIP, quantity, price per bond, total cost, and the settlement date (usually T+3, meaning three business days after the trade). Once you confirm, the order is sent to the market. If it's a market order, it will fill within seconds or minutes. If it's a limit order, it will wait until the bond reaches your price or the order expires.

Bond settlement and holding your bonds to maturity

After your bond order fills, it enters the settlement process. Most bonds settle on a T+3 basis, meaning three business days after the trade date. During this time, Fidelity is arranging the transfer of the bond to your account and the transfer of funds from your account to the seller. You can see the pending trade in your account under Recent Activity or Positions, but you won't own the bond outright until settlement is complete.

Once settled, the bond appears in your Holdings under Fixed Income. Fidelity will track the bond's current market value (which changes daily as interest rates move) and display your unrealized gain or loss. You'll also see the coupon payment schedule — the dates when the bond will pay you interest. Most bonds pay interest semiannually, though some pay quarterly or annually.

If you hold the bond to maturity, you don't need to do anything. On the maturity date, Fidelity will automatically deposit the bond's face value into your account. The bond will disappear from your Holdings, and your interest payments will stop. If you want to sell the bond before maturity, you can do so through the same Trade interface — click Sell, enter the quantity, and place your order at the current bid price.

Buying bond funds and ETFs as an alternative

If picking individual bonds feels complicated or you want when ready diversification, Fidelity also lets you buy bond mutual funds and bond ETFs with no transaction fee. A bond fund pools money from many investors and buys a portfolio of bonds, managed by a professional. An ETF does the same but trades like a stock during market hours.

Bond funds and ETFs are simpler to buy than individual bonds: you search for the fund by its ticker symbol (like BND for Vanguard Total Bond Market ETF or VBTLX for Videlity Total Bond Market Fund), enter the number of shares you want, and place the order just like you would for a stock. There's no markup, no CUSIP number to hunt down, and no settlement delay beyond the standard T+1 or T+2.

The trade-off is that you own a small piece of many bonds rather than specific bonds you've chosen. You also pay an ongoing expense ratio — a small annual fee charged by the fund manager. For most bond funds, this fee is between 0.03% and 0.20% per year. Individual bonds have no ongoing fee, but you pay the upfront markup when you buy and the markdown when you sell.

What to do if your bond order doesn't fill

If you placed a limit order and the bond never reached your price, your order will expire on the date you set. When this happens, Fidelity will notify you, and the order will be canceled. You can then place a new order at a different price or move on to a different bond.

If you placed a market order and it didn't fill within a few minutes, contact Fidelity's Fixed Income desk. Market orders on bonds should fill quickly, but in rare cases — especially for less liquid bonds — the order may be delayed or rejected if no seller is available at the current ask price. Fidelity's phone line for bond trading is available during market hours, and representatives can help you troubleshoot or suggest alternative bonds with similar characteristics.

If you're having trouble finding a bond you want, check that you've entered the CUSIP correctly. A single digit off will return no results. You can also widen your search filters — for example, if you're looking for a specific corporate bond and can't find it, search for all corporate bonds from that issuer and see what's available.

Frequently Asked Questions

Do I need a minimum amount of money to buy bonds on Fidelity?

Most individual bonds have a minimum purchase of $1,000 face value, so you need at least $1,000 plus the markup to buy one bond. Bond funds and ETFs can be bought in smaller amounts — you can buy a single share of a bond ETF for whatever its current price is, which might be $80 to $100. There's no account-level minimum to trade bonds on Fidelity if you already have an account open.

Can I sell a bond before it matures?

Yes. Go to your Holdings, find the bond, and click Sell. Fidelity will show you the current bid price (what buyers are offering) and calculate your proceeds after the markdown. You'll realize a gain or loss depending on whether interest rates have moved since you bought it. The sale settles in one to three business days, just like a purchase.

What's the difference between a bond's coupon rate and its yield to maturity?

The coupon rate is the fixed interest rate the bond pays each year — it never changes. Yield to maturity (YTM) is the total return you'll earn if you hold the bond until it matures, accounting for the price you pay today. If you buy a bond at a discount (below face value), the YTM will be higher than the coupon rate. If you buy at a premium (above face value), the YTM will be lower.

Are Treasury bonds safer than corporate bonds on Fidelity?

Treasury bonds are backed by the U.S. government and carry virtually no default risk, while corporate bonds carry the risk that the company may fail to pay. This is why Treasuries typically offer lower yields than corporate bonds of similar maturity. Both are equally safe to buy on Fidelity — the platform straightforward connects you to the market; the risk depends on the bond issuer, not the broker.

What happens if the bond issuer defaults while I own it?

If a bond issuer defaults, you may lose some or all of your investment. Fidelity will notify you of any missed payments, but the firm cannot recover your money — you become a creditor of the issuer and may recover funds through bankruptcy proceedings. This is why credit ratings matter: higher-rated bonds (AAA, AA, A) have lower default risk than lower-rated bonds (BBB and below).