Fixed Income Investing
Fixed income investments are designed to generate a specific level of interest income, while also providing diversification, capital preservation, and potential tax exemptions.
Understanding fixed income investments
Fixed income investments are designed to generate income and help provide capital preservation. If you’re looking for potential tax benefits and want to diversify your portfolio, high-quality fixed income investments could be an option for you.
Bonds, such as U.S. Treasuries and corporate or municipal bonds, are traditional types of fixed income investments. Investors may also consider mutual funds and ETFs that hold fixed income investments.
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Why invest in fixed income?
Whether your goal is to diversify your investments, save for the future, receive dependable income, preserve principal, or help minimize taxes, fixed income investments could be a way to reach your goals.
The Benefits and Risks of Fixed Income Investing
- Benefits
- Risks
- BenefitsFixed income investments generally carry lower risk than stocks. They also function well as a way to generate income or value from your investments on a consistent basis.
- RisksJust because fixed income funds usually are less risky options doesn’t mean there is no risk involved. As with stocks, your fixed income investment could be affected by external factors such as market conditions, inflation, or interest rates.
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Think about your fixed income objectives.
Generate IncomeUse fixed income securities to provide a regular, predictable stream of revenue.
Diversify your portfolioHelp smooth out the highs and lows in a stock portfolio with fixed income securities.
Protect your investmentsAdd stability to your portfolio with high-quality fixed income investments, like Treasuries, CDs, or other highly rated bonds.
Create tax benefitsSome fixed income securities, like municipal bonds, generally have preferential tax treatment where coupon payments Tooltip may be exempt from federal and state income taxes.
Consider your investing style:
Get professional management of your fixed income.
- Wasmer Schroeder™ StrategiesWasmer Schroeder Strategies offer a wide range of fixed income separately managed accounts across the duration, credit, and tax-efficiency spectrums. The choices include actively managed and bond ladder portfolio strategies with both taxable and tax-exempt debt securities. Investment minimums start at $250,000.Learn more about Wasmer Schroeder Strategies
- Other professionally managed solutionsDiscover a wide range of wealth and investment management solutions, including separately managed accounts for specialized investment strategies to help you meet your needs. Investment minimums vary by service but may start as low as $5,000.See all our investment management offerings
Manage your own fixed income investments.
- Bond mutual funds & bond ETFsThese are professionally managed investment products made up of a diversified mix of underlying securities, often with low investment minimums.Learn more about bond mutual funds and bond ETFs
- Certificates of deposit (CDs)CDs are federally insured1 bank deposits that pay a stated amount of interest for a specified period and promise to return your money on a specific date.Learn more about CDs How to buy CDs online
- Individual bondsBonds typically pay a set schedule of fixed interest payments and promise to return your money on a specific maturity date.Learn more about individual bonds
Take advantage of our fixed income expertise.
Stay at the forefront of modern investing with insights and ideas from Schwab experts, including Kathy A. Jones, Managing Director and Chief Fixed Income Strategist, SwissFin Center for Financial Research.
Talk to a SwissFin Fixed Income Specialist.
Our specialists offer objective, non-commissioned guidance on a wide range of fixed income products and strategies including ladders, bullets, barbells, and more. You can expect personalized service on topics such as:
- Help with choosing from a wide variety of investment options
- Suggestions for adjusting to changing market conditions
- Assistance with using our online trading features