Public Bonds
Buy corporate and Treasury bonds for as little as $100 and in any increment.
- Invest in corporate and Treasury bonds, as well as other traditional and alternative assets.
- $100 minimum.
- Lock in a high yield with a Public Bond Account.
Navigating the investment landscape can be overwhelming, even when it comes to fixed-income securities like bonds and CDs. While both aim to offer conservative growth, they differ in risk and returns.
This article will break down the essential differences, empowering you to choose the option that best suits your financial strategy.
Bonds | CDs | |
---|---|---|
Issuer | Issued by governments, municipalities or corporations. | Issued by banks and credit unions. |
Risk level | Riskier, with the potential for issuer default, especially for corporate and high-yield bonds. | Low-risk, typically insured by FDIC up to $250,000 per depositor. |
Interest rate | Can have fixed or variable rates, usually higher than CDs, due to increased risk. | Can have fixed or variable rates, but fixed-rate CDs are most common. |
Maturity | Maturity periods can range from months to 30 years or more. | Usually have shorter terms, ranging from months to five years. |
Market trading | Can be traded on secondary markets before maturity, leading to price fluctuations. | Cannot be traded; must be held until maturity or withdrawn early with penalties. |
Principal | Principal is at risk if sold before maturity at a lower price or if the issuer defaults. | Principal is safe, and full amount is returned at maturity, assuming no early withdrawal. |
Insurance | Not insured by the FDIC or other agencies. | Typically insured by the FDIC up to $250,000 per depositor per bank. |
Interest payments | Typically pay periodic interest. | Interest may be paid at maturity or periodically, depending on the terms. |
A bond is a debt security through which you lend money to an issuer, such as a government, corporation or other entity.(1) In return, the issuer promises to pay you interest at regular intervals, known as coupon payments, and to return the full amount of your loan when the bond reaches its maturity date. The full amount of your loan is known as the bond’s face value.
Organizations commonly use bonds to raise funds for projects or operations and are generally considered more stable than stocks. Because they provide regular interest payments, bonds are classified as fixed-income securities.
Public Bonds
Buy corporate and Treasury bonds for as little as $100 and in any increment.
Paid non-client promotion. Finder does not invest money with providers on this page. If a brand is a referral partner, we're paid when you click or tap through to, open an account with or provide your contact information to the provider. Partnerships are not a recommendation for you to invest with any one company. Learn more about how we make money.
Finder is not an advisor or brokerage service. Information on this page is for educational purposes only and not a recommendation to invest with any one company, trade specific stocks or fund specific investments. All editorial opinions are our own.
A certificate of deposit (CD) is a type of savings account that holds a fixed amount of money for a set period, known as the term, which can range anywhere from three months to 10 years.(4)
In exchange for leaving your money untouched during the term, the bank or credit union usually pays a fixed interest rate, which is typically higher than that of a regular savings account. At the maturity date — when the term ends — you can withdraw your money and the interest earned.
While fixed-rate CDs are most common, some CDs offer variable rates that fluctuate over time.
CDs are considered a low-risk, stable way to grow your savings, though you typically can’t access your money early without paying a penalty.
Western Alliance Bank 12 months CDs through Raisin
Western Alliance offers a strong 3.00% APY on its 12-month CD through Raisin. Pay no fees and just a $1 minimum deposit.
Choosing between bonds and CDs depends on your financial priorities and how you prefer to manage your money.
Bonds may offer regular income and the potential for higher returns, but they come with more risk and price fluctuations. Fixed-rate CDs, however, provide guaranteed returns with a fixed interest rate, minimal risk and no price fluctuations, though your money is typically locked away for a set period.
If you’re ready to explore investment options, check out the best brokerage accounts to find the right platform for your financial goals.
Yes, minors can own bonds, specifically Series I and Series EE bonds, through TreasuryDirect.(5) However, an adult must purchase these bonds, either as a gift or on behalf of the minor.
Interest earned on CDs is considered taxable income by the IRS. Interest on bonds is taxed depending on the issuer: interest from corporate bonds is taxable at the federal level and may be subject to state and local taxes. Interest from municipal bonds is usually exempt from federal taxes and sometimes from state taxes if issued in your state. US Treasury bond interest is subject to federal taxes but exempt from state and local taxes.(6)
You have to be 18 to legally start investing yourself, but teens can use investing apps with the help of their parents to start early.
Starting October 16, Robinhood Legend will become available to all Robinhood users for free. See what’s included in this new desktop platform.
24-hour stock trading is available from Robinhood, Interactive Brokers, Schwab and E*TRADE. Compare your options here.
See how to earn uncapped bonuses from Robinhood October 16–27, including 3% IRA transfers, 2% on margin balance transfers and more.
T-bills come with virtually no risk and are exempt from state and local taxes, but they don’t earn interest like CDs do.
SoFi’s Roth IRAs stand out for their low trading costs, access to both human and robo-advisory services and 1% IRA contribution match.
Check out the best investment newsletters to stay informed and find new opportunities.
Some of the best ways to invest and make money daily include buying stocks and ETFs, using a high-yield savings account and staking crypto.
Start your child on a path toward financial success with a Roth IRA for kids.
Set your child up for success with these long-term investment options and strategies.