Yes, you can buy bonds on Robinhood, but the selection is limited to corporate bonds and Treasury bonds

Robinhood lets you buy individual bonds directly through its platform. You can purchase corporate bonds (debt issued by companies) and Treasury bonds (debt issued by the U.S. government). The bonds trade on the secondary market, meaning you are buying from other investors rather than directly from the issuer. Robinhood does not charge a commission on bond trades, though the price you pay includes a markup that varies by bond.

The bond inventory on Robinhood changes daily based on what other investors are selling. You cannot buy new bond issues directly from the Treasury through Robinhood — for those, you would use TreasuryDirect.gov or a traditional brokerage. Robinhood also does not offer municipal bonds, bond funds, or bond ETFs.

Key Takeaways

  • Robinhood offers corporate bonds and Treasury bonds on the secondary market, with no commission charged on trades.
  • The bond selection changes daily and depends on what other investors are selling at any given time.
  • You cannot buy newly issued Treasury bonds through Robinhood; TreasuryDirect is the direct route for those.
  • Robinhood does not offer municipal bonds, bond funds, or bond ETFs as of now.
  • The price you pay includes a markup that is not shown separately, so comparing prices across brokerages can be difficult.

How to find and buy a bond on Robinhood

Open the Robinhood app or website and use the search bar to look up a specific bond. You search by the bond's ticker symbol or the company name. Once you find the bond, you will see the current ask price (the price sellers are asking), the yield to maturity, and the maturity date. Tap or click to place an order.

Robinhood lets you place a market order (buy at the current price when ready) or a limit order (buy only if the price drops to a level you set). After you place the order, it goes into a queue. If another investor accepts your offer, the trade settles in two business days, and the bond appears in your account.

The bonds you buy are held in your Robinhood account. You can sell them at any time by searching for the bond again and placing a sell order. When the bond matures, Robinhood will deposit the principal back into your cash balance.

Corporate bonds versus Treasury bonds on Robinhood

Corporate bonds are issued by companies to raise money. They typically pay higher interest rates than Treasury bonds because they carry more risk — if the company runs into financial trouble, it might not pay you back. Robinhood's corporate bond selection includes bonds from large, established companies, though the specific bonds available change based on what sellers are offering that day.

Treasury bonds are issued by the U.S. government and backed by the full faith and credit of the United States. They carry almost no default risk, which is why they pay lower interest rates. On Robinhood, you can buy Treasury bonds that other investors are selling on the secondary market. These are bonds that were originally issued at some point in the past and are now trading between investors.

If you want to buy a newly issued Treasury bond directly from the government at the lowest possible price, you would use TreasuryDirect instead. TreasuryDirect charges no markup and lets you buy Treasury bills, notes, and bonds in amounts as small as $100. Robinhood's Treasury bonds are older issues trading at whatever price the market sets.

The markup and pricing on Robinhood bonds

When you buy a bond on Robinhood, the price you see already includes a markup. Robinhood does not charge a separate commission, but it makes money by buying bonds from sellers at a lower price and selling them to you at a higher price. The difference is the markup, and it is not shown as a separate line item on your order.

This markup varies depending on the bond. Bonds that trade frequently and have many buyers and sellers typically have smaller markups. Bonds that trade rarely or have fewer market participants may have larger markups. You have no way to see the markup before you buy, and you cannot compare Robinhood's markup to another brokerage's without checking both platforms.

The yield to maturity shown on Robinhood accounts for the price you are paying, so it reflects what you will actually earn if you hold the bond to maturity. If you sell before maturity, your return depends on what the bond is worth at that time.

Bonds you cannot buy on Robinhood

Robinhood does not offer municipal bonds (bonds issued by states, cities, and local governments). These bonds often pay interest that is free from federal income tax, which makes them attractive to investors in high tax brackets. To buy municipal bonds, you would need to use a traditional brokerage like Fidelity, Charles Schwab, or Vanguard.

Robinhood also does not offer bond funds or bond ETFs — funds that hold many bonds and let you own a diversified portfolio with a single purchase. If you want to own bonds through a fund rather than individual bonds, you would need to move to a different brokerage.

You cannot buy newly issued Treasury bonds directly through Robinhood. If you want to buy Treasury bonds at issue (the original sale), you must use TreasuryDirect.gov, which is the government's official platform. Some traditional brokerages also let you buy new Treasury issues.

Why you might choose Robinhood for bonds versus other brokerages

Robinhood's main advantage is that it charges no commission on bond trades. If you are buying individual bonds and plan to hold them to maturity, the lack of commission can save you money compared to a brokerage that charges per trade. The app is also straightforward to use if you already have a Robinhood account for stocks.

The main disadvantages are the limited selection and the hidden markup. You cannot buy municipal bonds, bond funds, or newly issued Treasuries. The markup on secondary-market bonds is not transparent, so you may pay more than you would at another brokerage without knowing it. If you want to build a diversified bond portfolio or explore more bond types, a traditional brokerage offers more options.

What happens when your bond matures on Robinhood

When a bond reaches its maturity date, the issuer pays back the principal (the original amount you invested) to Robinhood, and Robinhood deposits that money into your cash balance. You do not have to do anything — the process is automatic. The interest payments you received along the way are also deposited into your cash balance as they were paid.

Once the principal is back in your account, you can use that cash to buy another bond, invest in stocks, or withdraw it. Robinhood will send you a notification when the bond matures so you know the money has arrived.

Frequently Asked Questions

Do I pay taxes on bond interest from Robinhood?

Yes. The interest you earn on corporate bonds and Treasury bonds is taxable income. You will receive a Form 1099-INT from Robinhood at the end of the year showing how much interest you earned. Treasury bond interest is exempt from state and local income tax but is subject to federal income tax. Corporate bond interest is subject to all income taxes.

Can I set up automatic reinvestment of bond interest on Robinhood?

No. Robinhood deposits bond interest into your cash balance, and you must manually decide what to do with it. You can buy another bond, invest in stocks, or leave it in cash. Some traditional brokerages offer automatic reinvestment, but Robinhood does not.

What is the minimum amount I need to buy a bond on Robinhood?

Most bonds trade in increments of $1,000, so that is typically the minimum purchase. Some bonds may have different minimums depending on what is available for sale. Check the bond's details before you place an order to see the exact amount required.

Can I sell a bond before it matures?

Yes. You can sell any bond you own at any time by searching for it and placing a sell order. The price you receive depends on what other investors are willing to pay at that moment. If interest rates have risen since you bought the bond, its value will have fallen, and you may sell it for less than you paid. If interest rates have fallen, its value will have risen, and you may sell it for more.

What happens if a company defaults on a corporate bond I own through Robinhood?

If the company stops paying interest or fails to repay the principal, you lose that money. Robinhood does not insure bond losses. You can file a claim with the Securities Investor Protection Corporation (SIPC) if Robinhood itself fails, but SIPC does not protect you against the issuer's default. This is why corporate bonds carry more risk than Treasury bonds.