2019: Charles Schwab U.S. Treasury t-bonds, t-bills, tips, frn and t-notes trading - 1 year, 5 years, 10 years maturity. Government bonds minimums and commission rates.


How to Buy U.S. Treasuries at Schwab

Many brokerage firms offer Treasury bonds, but not all of them have the same level of resources as Charles Schwab. If you open a Schwab trading account, you’ll be able to use the broker’s user-friendly tools to buy and sell government debt. Here’s how to do it:


Step 1: Learn about Bonds First

Before you pour large amounts of money into an investment, you definitely want to educate yourself about the details of the asset. Using our Schwab test account, we found lots of learning materials on bonds, including U.S. government bonds.

For example, there are articles and videos covering many different topics, such as the differences between Treasury notes and Treasury bonds, TIPS and zeros, and much more.

Besides sovereign debt, there is information on bonds in general. Topics we found include the pricing of fixed-income securities and common errors investors make with these assets.

To locate Schwab’s bond learning materials, you need to click on ‘Products’ in the top menu. Next, scroll down to the section labeled ‘Investment Products.’ Here, click on ‘Bonds, CDs and Other Fixed Income.’


Step 2: Use the Broker’s Search Tool

After you’ve learned a sufficient amount concerning the strengths and weaknesses of government debt, it’s time to look for some Treasury bonds available through Schwab. Locating the company’s bond search tool is easy; just click on ‘Research’ in the top row and select ‘Bonds & Fixed Income.’


Charles Schwab Buying T Bill


You’ll be taken to a new page (you may have to agree to some fine print about bond trading first) with a grid of yields. The left-hand column will be a selection of bond types, such as munis, corporate debt, and U.S. Treasury bonds. They are broken down into maturity dates with a variety of yields. Clicking on a yield generates a large list of government bonds with the corresponding yield and maturity date.

Besides the grid of yields and maturity dates, Schwab also provides a screener to look for bonds with specific characteristics, such as coupon rate or face value. This search engine is found by clicking on the tab entitled ‘Find Bonds & Fixed Income’ on the page with the grid.

The debt screener has many features. For example, it’s possible to specify a CUSIP number, a range of maturity dates, a coupon frequency, or a minimum yield.


Step 3: Choose a Bond

Whichever search method you choose, the results will be displayed in a similar fashion. A ‘buy’ link is shown in the far left-hand column. Next is the bond’s title, such as “US Treasury 1.5% 03/31/2019,” which is a government bond maturing on March 31, 2019 with a 1.5% coupon. The quantity available is also shown along with the most recent trade price, the accrued interest, and yield to maturity.

Clicking on a bond’s title generates a pop-up window with more details, such as bid-ask spread (including bid and ask yields and yields to maturity), minimum trade quantity, how coupon payments are made, the call status, and the CUSIP number.

On this pop-up page there is also a market depth tab. Market depth shows you the bids and asks that are coming in for a specific bond. Details include the number of bonds in the bids and asks and the prices.

Look over a bond’s details to help you make a selection. When you’re ready, it’s time to submit an order.


Step 4: Submit an Order

Clicking on the ‘buy’ link in a search’s results produces Schwab’s bond order ticket. An order can be submitted as a market or limit fill-or-kill order. A limit order automatically has the limit price entered, and it’s not possible to change it. During our research, the limit was the last quoted price. You’ll also need to enter the quantity of bonds you want.

Schwab doesn’t charge a commission on Treasury bonds, but there is a markup (for purchases) or a markdown (for sales) in the price.


Step 5: Treasury Bond Funds Are Available, Too

If you don’t find a specific bond you like, or simply don’t trust your own judgment, Schwab offers a good selection of U.S. Treasury bond funds. Many of these have no load and no transaction fee. For example, we found DIAVX, the Dreyfus Inflation Adjusted Securities Fund. Its portfolio is made up almost entirely of US Treasury bonds and notes.


Charles Schwab Review and Rating

Charles Schwab rating



Firstrade

Continue Reading