Robinhood has quickly made a name for itself since being founded in 2013 as a commission-free broker with an intuitive and simple interface design.
Since there is no such thing as a free lunch, Robinhood makes money from payment for order flow, subscriptions for their premium account (Robinhood Gold), margin lending, and investing uninvested cash.
Its 11+ million monthly active users can choose between investing in stocks, options, ETFs, and cryptocurrency, all without trading fees.
Can you buy bonds on Robinhood?
Bonds currently provide appealing fixed-interest returns to investors due to high-interest rates in many economies, making them a hot financial product.
Sadly, Robinhood does not offer investing in individual bonds but only in bond ETFs. That means you can buy a passive fund (ETF) consisting of many bonds but not individual ones.
Each approach has pros and cons, with ETFs being an excellent risk diversifier but carrying a small management fee (contained in TER – Total Expense Ratio) and being sensitive to future interest rate changes.
Buying individual bonds gives you a stable and predictable income. Still, there is always the risk of the bond issuer defaulting and/or price drops if selling the bond before maturity.
If you are looking for an alternative platform that would allow you to buy individual bonds, we got you covered. Below we will go through our top picks of brokers that offer individual bonds, among other products:
Best Robinhood alternatives for investing in bonds
Interactive Brokers | Best global broker overall
It was founded in 1978 and is one of the world’s most trustworthy brokers. It offers various financial products, including bonds from the U.S., Canadian, U.K., European, and Hong Kong markets. The bond trading fees are reasonable but rise with larger trading volumes. Its IBKR GlobalTrader mobile app is a welcome option for beginners.
TD Ameritrade | Best broker for commission-free bond trading (U.S. treasuries)
One of the leading U.S. brokers became a part of the Charles Schwab group after they acquired the company in 2019. Some of its major advantages are commission-free stock, ETF, and options trading, alongside a wide offering of different financial products, including mutual funds, fixed income (bonds and CDs), futures, and forex. They also offer commission trading of U.S. treasuries on auction and charge fees on a net yield basis for other bonds and CDs.
E*TRADE | Best for beginner bond investors
Having been around since 1982 and is regulated by top-tier U.S. financial institutions, E*TRADE is considered both a reputable and a beginner-friendly broker. They offer a wide choice of financial products such as stocks, bonds, ETFs, and more, with most coming with zero commissions attached, and all in an easy-to-navigate mobile platform. Unfortunately, forex trading and some commonly available deposit methods and customer service support options are unavailable.
TradeStation | Best for educational and research tools
Above-average educational and research tools and direct access to crypto make TradeStation stand out from other brokers on this list. The platform (especially the desktop version) offers many advanced tools and is thus more suitable for more advanced investors. Commission-free trading is available for stocks and ETFs, but bond trading fees are fairly high. Other cons of the platform include the lack of fractional shares and high mutual fund fees.
|Broker||Minimum deposit||Supported Products||Currency conversion fee||Available in the US?||Bonds Trading fees|
|Interactive Brokers||$0||Stocks, ETFs, bonds, mutual funds, currencies, options, warrants, and futures||0.08-0.20 basis points x Trade Value per order ($1-$2 minimum per order)||Yes||From $1 (corporate, municipal) to $5 (treasuries) minimum (could be more with larger volumes)|
|TD Ameritrade||$50 (electronic transfers); no account minimum||Stocks, ETFs, mutual funds, options, fixed income (including bonds), futures, forex||Commission free (included in the spread)||Yes||Commission-free for U.S. treasuries on auction; net-yield based fees for other bonds|
|E*TRADE||$0 (Account must be funded within 30 days to remain open)||Stocks, ETFs, bonds, options, futures, mutual funds, managed portfolios||Up to 300 basis points||Yes||Commission-free for U.S. treasuries; $1 per bond ($10 minimum) for online secondary trades|
|TradeStation||$0||Stocks, ETFs, bonds, stock options, futures, futures options, indices, cryptocurrencies, and forex||0.6 basis points * trade values (min. $2 USD)||Yes||$50 per trade for U.S. treasuries; $14.95 + $5 per bond for corporate and municipal bonds|
#1 Interactive Brokers
Interactive Brokers at a glance
Having been around since 1978 and surviving multiple financial crises, the Interactive Brokers’ major advantage is its reputation. It is also publicly listed on the NASDAQ exchange (ticker: IBKR), making it more regulated than some other platforms.
Other significant advantages of using Interactive Brokers are its wide selection of financial products from over 150 markets, solid trade execution (IB SmartRouting), and supporting 24 currencies in its account. There are also 100+ currency pairs available for exchange.
Some downsides of using Interactive Brokers are its complex fee structure, lengthier than average registration and fund deposit processes, and limited commission-free trading (only available for US investors). However, the last point is largely mitigated using narrower spreads and lower FX fees than most competitors.
Speaking of the fee structure, there are two distinct plans to choose from – IBKR Lite and IBKR Pro. IBKR Lite offers unlimited commission-free trading for products such as U.S. listed stocks and ETFs, with low fees for other products and no account minimums or inactivity fees.
IBKR Pro is geared more towards advanced investors and active traders, offering fixed or tiered pricing plans without commission-free trading available. It also uses the IB SmartRouting system for advanced trade execution and uses APIs and some other advanced tools. You can compare the plans here.
Bond selection is wide, with U.S., Canadian, U.K., European, and Hong Kong bonds. The bond trading fees range from $1 (corporate, municipal) to $5 (treasuries) minimum for U.S. bonds, although this number rises with larger trading volumes.
The Interactive Brokers Trader Workstation (TWS) platform offers many basic and advanced features, such as a demo account, watch lists, alerts and monitoring in real-time, advanced technical analysis tools, and more. One of the downsides of the platform is that the learning curve can be steep for beginners, even with the provided educational materials.
The IBKR GlobalTrader mobile app is a much more intuitive choice for beginner investors, offering stocks, ETFs, and options trading in a more user-friendly format. Other app features include automatic currency conversions, fractional shares (only for US stocks), and more.
Overall, Interactive Brokers is a good choice for beginners and advanced investors looking for a secure broker and access to various financial instruments, including bonds.
#2 TD Ameritrade
TD Ameritrade at a glance
As one of the leading U.S. brokers, TD Ameritrade was acquired in 2019 by Charles Schwab, one of the largest brokers in the world. Their history goes much further, though, being founded in 1975 and amassing over 11 million active users and over $1 trillion in assets.
When you also consider that the broker is regulated by top-tier U.S., Singapore, and Hong Kong regulators, it is easy to see why it is considered one of the most reputable brokers out there.
It is probably best known for its commission-free trading of stocks, ETFs, options, and bonds (U.S. treasuries at auction). Other fixed-income assets (bonds, CDs, and UITs) have fees based on a net yield basis. There is also a $1 per bond transaction fee when trading bonds on the secondary market. Also, keep in mind that there are some minor service fees, which you can see in their fee structure.
Other financial products are also available, such as mutual funds, futures, other fixed-income assets (bonds and CDs), and forex trading (through the Charles Schwab Futures and Forex LLC platform). However, keep in mind that you can only trade on U.S. markets, unlike some other brokers which can offer you global investing exposure.
Regarding bond trading specifically, TD Ameritrade offers a wide range of investments, with over 40,000 offerings from over 100 dealers, 3,000+ bond mutual funds, and over 400 bond ETFs (out of which 300+ are commission-free).
Advanced bond trading tools, such as ready-made or self-created bond ladders (by using their Bond Wizard tool), are also available. There are also new issue offerings as well as rating and status changes for corporate and municipal bonds. You can get help (a personalised portfolio review) from their fixed-income specialists if needed.
Other commonly praised pros of TD Ameritrade include the brokers’ quality customer support, easy-to-navigate investment platforms (web and mobile), and excellent educational content. These are some reasons why it’s often considered a beginner-friendly broker.
Some of the cons of the platform include limited money transfer options (no credit/debit cards or electronic wallets) and the lack of fractional shares on offer.
E*TRADE at a glance
Offering a wide range of financial products and most of them with low or zero commissions, in an easy-to-navigate mobile platform makes E*TRADE an excellent choice for beginner investors. It is also a reputable broker, founded in 1982 and regulated by top-tier U.S. regulators such as SEC and FINRA, while also offering SIPC investor protection.
Some features that set apart E*TRADE from other brokers are access to rich educational resources (articles, videos, courses, webinars, and research tools) and their managed portfolios (Core Portfolios) which charge an annual 0.3% fee ($500 minimum).
As far as bond investing goes, it is important to note that E*TRADE offers 50,000+ bonds, but only from the U.S. markets. The fee structure for bond investing varies depending on the type of bonds you’re interested in. U.S. treasuries are commission-free at auction and secondary trades, but other bonds are charged a $1 fee per bond with a $10 minimum and a $250 maximum.
Broker-assisted bond trades are also offered (costing an extra $20), and new bond issues (except treasuries) offer a price that includes a selling concession. Interestingly, E*TRADE also offers ultra-short bond ETFs, which are diversified and low-risk investments.
You can see their full fee structure for bonds and other financial products here.
Some of the cons of investing with E*TRADE include the aforementioned access to U.S. markets only, the lack of forex trading, no email/live chat support (only phone and physical mail are available), and limited deposit options (credit/debit card and electronic wallet deposits are not accepted).
TradeStation at a glance
What sets TradeStation apart from other platforms on this list are being listed on the New York Stock Exchange, excellent educational and research tools and access to cryptocurrency. The choice of financial products is particularly wide, including stocks, ETFs, bonds, indices, and more.
Many of those products are commission-free, including stocks, ETFs, and all futures and options. One of the rarities is direct access to cryptocurrency trading (through the TSCrypto platform), but only including Bitcoin, Ethereum, and USDC.
Access to a vast catalogue of educational and research tools has been particularly praised with this platform. These include articles, videos, courses, webinars, and advanced research tools such as trading ideas and strategy builders.
There are desktop, web trading, and mobile platform to choose from in order of decreasing complexity and features available. The desktop platform (Desktop 10) is also highly customisable and offers many features, such as direct market access, dynamic market-scanning tools, automatic trade execution, and tools for custom trading strategies.
As far as bond trading goes, it’s important to note that TradeStation’s bond trading fees are fairly high, especially so for lower trading volumes. To be more exact, there is a $50 per trade fee for U.S. treasuries and $14.95 + $5 per bond fee for corporate and municipal bonds. This makes TradeStation’s bond trading more suitable for professional investors.
You can see their full fee structure (including bonds) here.
Apart from high bond trading fees, some other cons of using TradeStation include the platform being too complex for many beginners, the lack of fractional shares, and high mutual fund fees.
It is overall a good choice for experienced investors looking for a wide choice of (mostly) low-cost financial products and advanced research and trading tools, all packed into a professionally-looking platform.
What to look for in a broker that’s offering bond trading?
There are several key factors that go into the decision to choose a brokerage platform that offers bond trading:
- Platform’s overall experience and user interface: You want to ensure you are confident using the platform from start to finish. Factors like account opening, minimum deposit, user experience, available tools, etc., all come into play.
- The range of available bonds: Not all brokers offer bonds from a wide range of global markets. Make sure that the broker you choose has access to the bond markets that you’re interested in.
- Commissions: They say fees are the only 100% certain thing in investing. Needless to say, they can eat away at a large portion of our profits and it is important to keep them under control.
- Currency exchange fees: Bonds on different markets are denominated in different (most often local currencies). If you are not buying bonds in your domestic currency, you are exposing yourself to currency risk and currency exchange fees.
The bottom line
Bonds have become a more popular asset class in the current market environment with high-interest rates. Current bond yields make them attractive as an asset class with relatively limited risk and stable returns.
However, not all brokers (including Robinhood) offer access to individual bonds. In this article, we have highlighted some of the best alternatives in our opinion. Each platform has pros and cons, so it is important to choose wisely the one that best suits our needs.
Hopefully, we helped you with your choice. Feel free to give us your thoughts in the comments below!