What are fixed-income investments?

Fixed-income investments play a role in almost any diversified portfolio because they pay a fixed amount according to a set schedule. We offer a range of fixed-income products including municipal bonds, corporate bonds, treasury bonds, agency bonds and certificates of deposits.

How fixed-income investments work

Fixed-income investments such as bonds, are securities where you lend money in exchange for regular interest payments and the return of your principal investment at maturity. Because fixed-income investments have regular interest payments, they aren't subject to the same volatility as investments in stocks, ETFs, or mutual funds. Fixed-income investments are seen as safe and stable when compared to most other investment types.

As an example, the U.S. government may offer a Treasury note with a 4.5% coupon with a 10-year maturity. During this 10-year period, you would receive regular payments based on the coupon and the face value of the bond. If you invested $10,000 in a 10-year note with a 4.5% coupon, you would receive $450 annually. At maturity you would be repaid the original $10,000 investment in addition to the interest payments you received over the life of the bond, $4,500 total.

Fixed-income investments examples

There are various types of fixed-income investments available, each offering its own set of benefits.