How do I invest in bond funds?
According to the U.S. Securities and Exchange Commission (SEC), bond funds are a type of investment fund, such as a mutual fund, that primarily invests in bonds. A bond is basically an “IOU” to an agency, such as a federal agency, government or municipality. In return for the investment, the seller of the bond promises to pay the investor a specific value at the bond’s maturity date.Types of BondsThere are several different types of bonds, including corporate bonds, municipal bonds and government bonds. Corporate bonds are sold by public and private companies that are raising money for a specific project, such as building a new location or purchasing new equipment for the business. Government bonds are sold by the U.S. Department of Treasury and are backed by the federal government. Municipal bonds are sold by cities, counties and sate governments to pay for projects such as schools, hospitals and transportation initiatives.Where to Purchase Bond FundsYou can purchase most bonds throug
