- 1). Open a brokerage account. Ask bank, tax or legal advisers for recommendations or conduct an online search for "brokerage firms" to find a bricks-and-mortar or online firm that meets your needs. Review all terms, conditions and fees for the services provided before making your final decision.
- 2). Research bond funds online or in financial journals. Full-service brokerages also may have recommendations. Look for funds that invest in debt you are comfortable with and that demonstrate a long history of performance. Although there are no guarantees for future rates, this past experience is important to consider.
- 3). Choose the specific debt fund you are interested in purchasing and review the annual fees as well as the "load" of the fund. A fund's load is the amount paid to either buy or sell the fund. Funds can have a front load, back load or no load. Annual fees may increase if there are no upfront fees so look at the entire scenario.
- 4). Choose the type of fees you want to pay; The Securities and Exchange Commission limits front and back loads to 8.5 percent, but many mutual funds don't go higher than 5.5 percent and will lower fees for larger investments. You may want to run some numbers over a five-year period for the fee class to see if $100,000 with a 5 percent upfront fee results in higher returns, compared to the back-end or no-load fees with the annual management fees taken out as well.
- 5). Buy the fund either by contacting the customer service representative or logging into your online account. Record all information regarding the purchase with the confirmation number and the names of the fund's customer service reps, if applicable.
- 6). Pay for the fund within three days of buying it. You are not required to have money in the account prior to the purchase and the SEC gives you three days to complete securities transactions. You can write a check or perform an electronic funds transfer.
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