Ten bonds. One account.
6.36% yield.

You can find the Bond Account alongside other yield accounts (Treasury and High Yield Cash) on the Public app or on the web. You can fund the account from your existing buying power or from an external account with an investment of $1,000 or more. Each investment of $1,000 will be used to purchase a portfolio of ten fractional investment-grade and high-yield bonds in equal par value allocations. You may make a one-time investment into the Bond Account or schedule recurring investments on a weekly or monthly basis.

One key benefit of a Bond Account is locking in your yield at time of purchase. Unlike a savings account or other variable rate account, your yield for each bond is fixed at the time of purchase, though the return may be affected if you do not hold a bond to maturity, or if the issuer defaults or calls the bond. Other benefits include the ability to invest in ten bonds for $1,000, where typically individual bonds have minimums of $1,000+. However, fractional bonds carry some risks, which can be found here. Other risks include the risk of default, liquidity risk, and inflation risk (if inflation outpaces the fixed income from a bond, this may reduce the real return on investment.)

Compared to Public’s High Yield Cash Account and Treasury Account, a Bond Account generates a higher yield, but comes with higher risk of default and illiquidity. Like a Treasury Account on Public, the Bond Account reinvests interest at the current rate automatically once it hits a minimum threshold (in this case ~$100). Similar to other yield accounts on Public, cash in a Bond Account may be withdrawn at any time, but there is a small fee if bonds need to be sold to do so ($0.50 per $100).

Once you are invested in a Bond Account, your yield on that investment is locked in unless a bond in the account defaults, is called, or is sold. That means that even if interest rates fall (i.e. the Federal Reserve cuts rates), your Bond Account yield for deposits already made will not change. Note that the Bond Account yield will fluctuate daily and subsequent deposits into the account may be at different yields than your original deposit.

Purchases and Sales in the Bond Account are subject to a markup of 50 basis points (i.e. $5 per $1,000 invested). In addition, there is a $3.99 monthly fee for the account which is waived until 2025. The monthly account fee will also be waived for all Public Premium members. See fee schedule.

A Bond Account at Public is a separate account from your brokerage account but cash and securities are combined for SIPC coverage limits. SIPC coverage protects assets up to a total of $500,000, of which $250,000 applies for cash. There are additional terms and limits on SIPC coverage that aren’t discussed here. For full details, please refer to www.SIPC.org and read more on our SIPC FAQ.