Compare Income Products

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

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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 secondary Treasury purchases are free;1 other bonds purchased on the secondary market are $1 per bond. 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
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
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 annuities4 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. 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
Deferred Fixed Annuities4 Fixed rate of return set at time of purchase. Interest accrues daily and paid at the end of the specified term. Your contract receives a pre-determined rate and grows at that rate for the term you select. Issuer guarantees rates for the term of the annuity, subject to the claims-paying ability of the insurer. Most have provisions to withdraw a stated amount without surrender charges each year. Withdrawals before term end and above stated allowance subject to surrender charges.

Compare Deferred Fixed Annuities
No annual fee 3- to 9-year terms are available; minimum to open is $5,000 to $50,000 (varies by insurance company).