Fixed Income Online

What is Fixed Income Online?
What am I paying in commissions when I buy and sell fixed income products?
Why do the prices and yields change when I change my order quantity?
What is accrued interest?
What should I keep in mind when purchasing a fixed income product?
Where can I go to check out the credit ratings on an issuer?
What about exchange traded debentures?

What is Fixed Income Online?
As a BMO InvestorLine client you can buy and sell Canadian or US dollar-based fixed income products online. Start by searching through one of the largest online bond inventories for the fixed income product that meets your investment criteria. Choose amongst various types of fixed income products including federal, provincial and corporate bonds, strip coupons and residual bonds, T- Bills, commercial paper and bankers’ acceptances.

What am I paying in commissions when I buy and sell fixed income products?
In fixed income trading, the industry standard is to build commissions into the price. With Fixed Income Online, you can browse through our inventory at your leisure and check out our competitive offerings. By placing your trade online you will benefit from additional savings and a better price/yield than you would with a BMO InvestorLine representative.

Why do the prices and yields change when I change my order quantity?
Our prices and yields vary depending on the amount being purchased. In general, the larger the purchase amount, the better the quoted price and yield.

What is accrued interest?
Accrued interest is the interest that has accumulated on a bond since the last interest payment date. In calculating the total cost of a bond purchase, the purchaser must pay the accrued interest until settlement date. The purchaser then receives the full interest on the bond at the next interest payment date. Conversely, when one is selling a bond, the seller will receive the accrued interest as part of the total value of the trade.

What should I keep in mind when purchasing a fixed income product?

1. What am I earning on the investment?
   The yield-to-maturity. Assuming that you hold the fixed income product to maturity (and assuming that you reinvest all interest payments at the same rate.)
2. What is my time horizon? When do I need my money?
   The maturity date of the investment.
3. How safe is my money?
   Check the credit rating of the issuer or guarantee behind the investment. For sites which provide the credit, visit the list of bond rating agencies posted on our Useful Links page.
4. Can I sell my investment at any time?
   Assess the liquidity of the issue. In general, federal issues are the most liquid, followed by provincials and then corporates.
5. Will there be fluctuation in the market value of my investment?
   Understand the price volatility of your fixed-income investment. The lower the coupon rate and the longer the term-to-maturity, the higher the volatility.

Where can I go to check out the credit ratings on an issuer?
Visit the list of bond rating agencies posted on our Useful Links page.

What about exchange traded debentures?
At present, exchange traded debentures are only available through a BMO InvestorLine representative. The commission is a minimum of $35 plus $1 per bond (1 bond is $1000 face/par value). For example, 50 bonds or $50,000 face value of a bond would result in the following commission: $35 plus $50 = $85.