Minimum mark-up or mark-down of $19.95 applies if traded with a Fidelity representative. For U.S. Treasury purchases traded with a Fidelity representative, a flat charge of $19.95 per trade applies. A $250 maximum applies to all trades, reduced to a $50 maximum for bonds maturing in one year or less. Rates are for U.S. dollar–denominated bonds; additional fees and minimums apply for non-dollar bond trades. Other conditions may apply; see Fidelity.com/commissions for details. Please note that mark-ups and mark-downs may affect the total cost of the transaction and the total, or "effective," yield of your investment. The offering broker, which may be our affiliate, National Financial Services LLC, may separately mark-up or mark-down the price of the security and may realize a trading profit or loss on the transaction.
* Fidelity commissioned Corporate Insight to study bond pricing, available online, for self-directed retail investors from five brokers that offer corporate and municipal bonds. The study compared online bond prices for over 40,000 municipal and corporate inventory matches between February 8th and February 14th, 2018. It compared municipal and corporate inventories offered online in varying quantities. The study found on average that four competitors that bundled their mark-ups or fees into their online bond prices were asking an average of $13.32 more per bond. Corporate Insight determined the average cost differential by calculating the difference between the costs of matching corporate and municipal bond inventory at Fidelity vs. firms in this study that do not disclose their mark-up before or at the time of trade, then averaging the differences across all of the competitor firms. For the table, the example competitor trade costs range of $160–$485 is based on an average size order of $22,000 face or par value bonds and the average mark-ups observed among the four selected competitors displayed in the table. For the 12 months ending February 2018, Fidelity’s retail brokerage account holders who purchased individual municipal or corporate bonds purchased an average of 22 bonds per transaction.
In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities). Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Lower quality fixed income securities involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Foreign investments involve greater risks than U.S. investments and can decline significantly in response to adverse issuer, political, regulatory, market, and economic risks. Any fixed-income security sold or redeemed prior to maturity may be subject to loss.
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