Investing in bonds

Zoomer | January 1st, 2006

Q –  I am interested in holding government or commercial bonds instead of a bond mutual fund.  What denominations can I purchase them in ($1000, $5000, etc)? – R.D.


A – Bond prices are normally based on $1,000 face value, although the prices are quoted in $100s. So, for example, a bond that is quoted at $102.50 is actually selling for $1,025. One that is quoted at $95 is actually selling for $950.


Despite the quotes you see in the business pages, your broker may not be offering a specific bond at the same price or even have any in inventory. Your best bet is to check the bond listings and decide what type of bond you want (federal, provincial, corporate, etc.), the term to maturity (three years, five years, 10 years, etc), and your target yield. Then ask the broker to check the firm’s inventory to see what they have available that most closely meets your needs, or what they can acquire for you on the bond market. – G.P.