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Compare Income Products

Use this side-by-side comparison of investment features to help determine which fixed income products best fit your needs.

Questions?

Fixed Income Products

Product Income potential Growth potential Principal preservation and liquidity Fees or expense ratios Minimum investment and diversification
Individual bonds Fixed-rate bonds offer periodic payments of fixed amounts. Other types of bonds may vary their payments. None if bought at par value and held to maturity. Bonds can be purchased and sold in the secondary market prior to maturity at a profit or loss. Initial investment returned at maturity subject to the credit-worthiness of the issuer. Most bonds can be bought and sold on the secondary market; that sale can result in a profit or loss. Online Treasury bond purchases are free;1 other bonds purchased on the secondary market are $1 per bond with an $8 minimum. Generally $1,000 to $5,000, depending on the type of bond, though you'll need to purchase a broad array of bonds to diversify.
Bond funds Regular payments, though amounts vary depending on the underlying bond holdings of the fund. Potential for capital appreciation Unlike individual bonds, most bond funds do not have a maturity date, so your principal will fluctuate. Funds can be bought and sold daily. Mutual funds charge a fee represented by the expense ratio, which reflects operating expenses expressed as a percentage of the fund's average net assets.2 Most funds have minimum investments of $2,500 to $10,000. Bond funds are portfolios of bonds, which can offer broad diversification, though some funds are narrowly focused.
Brokered certificates of deposit (CDs) Interest rates are stated at the time of issuance; payments are generally made monthly, semiannually or at maturity. Principal is returned at the CD's maturity. None if bought at par value and held to maturity. CDs can be purchased and sold in the secondary market prior to maturity at a profit or loss. Your principal is insured against bank failure by the FDIC up to applicable FDIC limits.3 Most brokered CDs can be bought and sold prior to maturity at a profit or loss, although the secondary market may be limited. No fees for most new issues $1,000— Diversification becomes important for investments that exceed FDIC coverage limits.
Money market funds Regular payments, variable amounts Minimal; the objective of a money market fund is capital preservation, though some growth is possible. Money market funds aim to protect your principal, but they are not insured and do not come with any guarantee. You can buy or sell shares in a money market fund daily. 0.19%–0.55% in gross expense ratio per year2 $0 if core; otherwise $2,500 to $10 million. Underlying assets are generally concentrated in high quality, short-term money market securities.
Fixed income ETFs Regular payments, though amounts vary depending on the underlying holdings of the fund. Potential for capital appreciation Unlike individual bonds, ETFs do not have a maturity date. Investment return and principal value will fluctuate. Average net expense ratio 0.32% + trading commission in most cases. No minimum—one share of any ETF may be purchased. ETFs have a constantly changing portfolio of bonds, offering the potential for diversification.
Fixed income annuities Income for life for both immediate and deferred fixed income annuities (or optionally, period certain for immediate fixed income annuities); income amount is stated at purchase.4 None, except with optional cost of living adjustments Issuer guarantees income for the term of the annuity, often the investor's lifespan, subject to the claims-paying ability of the insurer. Initial investment generally not accessible. Fees included in purchase price; no annual fee. $10,000
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certificate of deposit (CD)

a debt instrument issued by commercial banks or thrifts to raise funds for business activities or to retire other debt; Fidelity offers a type of certificate of deposit called a brokered CD

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creditworthiness

measurement of the risk of default of an individual fixed-income security or the issuer of a fixed-income security; generally measured by one of the major ratings agencies

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FDIC

an independent agency of the federal government, created in 1933, charged with preserving and promoting public confidence in the U.S. financial system by insuring deposits in banks and thrift institutions up to applicable limits; by identifying, monitoring, and addressing risks to the deposit insurance funds; and by limiting the effect on the economy and the financial system when a bank or thrift institution fails; further information on the FDIC and FDIC coverage may be found at fdic.gov

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interest rate

the annual rate, expressed as a percentage of principal, payable for use of borrowed money

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issuer

a government, corporation, municipality, or agency that has issued a security (e.g., a bond) in order to raise capital or to repay other debt; the issuer goes to an underwriter to get their securities sold in the new issue market; for certificates of deposit (CDs), this is the bank that has issued the CD; in the case of fixed income securities, the issuer of the security is the primary determinant of the security's characteristics (e.g., coupon interest rate, maturity, call features, etc.)

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maturity, maturity date(s)

the date on which the principal amount of a fixed income security is scheduled to become due and payable, typically along with any final coupon payment. It is also a list of the maturity dates on which individual bonds issued as part of a new issue municipal bond offering will mature

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par

the stated value of an investment at maturity; includes bonds, life insurance policies, bank notes, currency, some stocks, and other securities; typically $1,000 for a corporate bond

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debt obligation/principal

an interest-bearing promise, to pay a specified sum of money (the principal amount) on a specific date; bonds are a form of debt obligation; categories of bonds are: corporate, municipal, treasury, agency/GSE

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Treasury bonds

Debt obligations of the U.S. Government with maturities of 10 years or longer. Coupon interest for Treasury bonds is exempt from state and local taxes, but is federally taxable. Interest income may also be subject to alternative minimum tax.

Before investing, consider the funds’ investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
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 and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.
1. For fixed income trades to which concessions apply, minimum charges will vary by channel. For online trades: $0 for U.S. Treasuries; $8 for all other bonds. For rep-assisted trades: $19.95 for all bond types. The maximum charge applied to a fixed income trade is $250. The maximum charge will be reduced to $50 for securities with a maturity date of one year or less.
2. Expense ratio fees could range anywhere from 0.01% to 2% or more per year on average assets in a given fund. See each fund's "Fees & Features" page for further details on any fees associated with a given mutual fund, and also see Understanding Fidelity FundsNetwork® Fees for more general information on applicable fees.
3. For the purposes of FDIC insurance coverage limits, all depository assets of the accountholder at the institution that issued the CD will generally be counted toward the aggregate limit (usually $250,000) for each applicable category of account. FDIC insurance does not cover market losses. All of the new issue brokered CDs Fidelity offers are FDIC-insured. For details on FDIC insurance limits, see www.fdic.gov.
4. Fixed income annuities available through Fidelity are issued by third party insurance companies, which are not affiliated with any Fidelity Investments company. These products are distributed by Fidelity Insurance Agency, Inc., and for certain products, Fidelity Brokerage Services, Member NYSE, SIPC. A contract's financial guarantees are solely the responsibility of and are subject to the claims-paying ability of the issuing insurance company.
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