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Bond funds – Transaction Fee Mutual Funds
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Pricing
$74.95***
Broker-assisted trades:
Online fee plus $25
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Products
Bond ETFs
All listed ETFs, including Schwab ETFs™1
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Pricing
$0 commission for online trades
Broker-assisted trades:
Additional $25
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Products
Preferred securities
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Pricing
$0 online1 (Minimums may apply for secondary trades)
$5 automated phone trades
Broker-assisted trades: additional $25
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The fundamentals of bond pricing
The fundamentals of bond pricing
#1: Understand all costs and fees
Bonds are often quoted with several cost components bundled together, so it's important to understand any commissions or transaction fee built into the price (and indirectly the yield), as well as any additional fees.
#2: Compare costs to maximize your return potential
Because the yield you earn on a bond is impacted by what you pay for it, shopping around for the lowest price and transaction fees can help you potentially increase your return on a bond without adding risk.
#3: Compare price against yield
Consider a hypothetical bond with a 4% coupon rate and a 10-year maturity. The higher the price, the lower the yield.
The fundamentals of bond pricing
- Dealer
- A
- B
- C
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Dealer
Price
>
A
$100.00
>
B
$100.50
>
C
$101.25
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Dealer
Yield to Maturity
>
A
4.00%
>
B
3.94%
>
C
3.85%
>
Source: Schwab Center for Financial Research and Bloomberg. Assumes semi-annual coupon payments. For illustrative purposes only.
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