Expert: Doug Ingram - 9/9/2004

Question
Where do you buy bonds at?  How much are they?  What do they pay later?

Answer
Individuals usually buy them from broker dealers.   Email me your city and I'll try to recommend a few to choose from.

For smaller amounts, savings bonds are not a bad idea.  They can be purchased at national banks or on the web.

http://www.publicdebt.treas.gov/sav/sbfaqbuy.htm

Savings bonds can be as little as $50.  Muni bonds usually have a minimum size of $5,000.

Bonds with no coupons (or low coupons) can be purchased at a discount.  A bond that matures in 20 years (with no coupons) at $10,000 can be purchased for less than $4,000

Unless you are dealing with a risky bond with a sub-standard rating, bonds pay "as promised".
If you buy a 10-year bond with a 5% coupon and pay $10,000, you'll get $500 a year ($250 every six months) - and your $10,000 back at the 10-year maturity.

doug@bondtraders.com