Learn about the best ways to invest in bonds.
Key Points
- Bonds offer a steady source of income through interest payments and may appreciate as interest rates decline.
- Purchase a combination of bonds, such as T-bills and corporate bonds, to lower risk.
- Bond ETFs like LQD and BNDX give simple access to diversified bond markets with respectable yields.
Best Bonds to Purchase for the Long Term (2026):
A bond is a loan to a government or corporation that pays a fixed interest rate and has a fixed maturity date. Many investors purchase bonds to help lower risk, diversify their portfolios, and earn interest income.
Aside from the guaranteed fixed-income return, bonds offer several additional benefits in a high-interest-rate environment. For example, if interest rates drop, the price of a bond rises, and you may gain money by selling your bond instead of keeping it to maturity.
If rates continue high, more investors are likely to resort to bonds for a steady return. That includes bond funds and bond exchange-traded funds (ETFs), as well as alternatives such as corporate and municipal bonds. Thinking about investing in bonds? Read on to find some of the greatest bonds and bond ETFs to purchase today.
Top bonds to consider in 2026
- 10-year Treasury note
- 26-week Treasury bills
- iShares iBoxx Investment Grade Corporate Bond ETF
- Vanguard Tax-Exempt Bond ETF
- Vanguard Short-Term Corporate Bond Index Fund
- Guggenheim Total Return Bond Fund
- Vanguard Total International Bond Index Fund
- Fidelity Short-Term Bond Fund
1. 10-year Treasury note
There’s not much better than Treasuries for a plain-vanilla bond investment. U.S. Treasury bonds are regarded as the safest in the world and are typically considered risk-free. The 10-year rate serves as a benchmark for various interest rates, including mortgage, auto loan, student loan, and credit card rates.
Treasury rates are highly correlated to the federal funds rate, so they will likely move in lockstep with the Fed’s rate moves.
2. 26-week Treasury bills (T-bills)
T-bills are the gold standard for short-term cash deposits. These are short-term instruments issued by the U.S. government. They are different from Treasury notes and bonds in that they don’t pay interest. The U.S. Treasury, on the other hand, sells T-bills at a discount and redeems them at maturity for face value.
The Treasury offers T-bills with maturities of 4, 6, 8, 13, 17, 26, and 52 weeks. The 26-week duration is a popular choice since it often pays a greater interest rate than shorter-term notes.
3. iShares iBoxx Investment Grade Corporate Bond ETF
Investment-grade corporate bonds tend to yield more than government bonds. They’re not “risk-free,” as in 10-year Treasury notes, but they are, on the whole, lower-risk bonds backed by corporations with investment-grade credit ratings.
If you want to invest in high-quality corporate bonds, the iShares IBoxx Investment Grade Corporate Bond ETF makes it simple. With this bond ETF, you get a single fund that gives access to more than 3,050 investment-grade bonds. That bond fund was paying more than 4.5% in early 2026.
4. Vanguard Tax-Exempt Bond ETF
Municipal bonds are issued by state and local governments to help finance their operations and projects. They provide investors with a means to generate interest income, with the added advantage that the interest is free from federal taxes.
The Vanguard Tax-Exempt Bond ETF seeks to track the performance of investment-grade municipal bonds. The fund has around 9,950 stocks and produced about 3.3% in early 2026.
5. Vanguard Short-Term Corporate Bond Index Fund
Depending on your financial needs, short-term bonds may be preferable to long-term bonds. Short-term bonds, as the name implies, have short maturities, which are generally regarded to be five years or less; they have less interest rate risk and are more likely to protect the principal because of the shorter length.
The portfolio holds more than 2,700 bonds of blue-chip firms, including Bank of America (BAC -2.92%), CVS Health (CVS +2.75%), and AbbVie (ABBV -0.89%). It seeks to replicate the Bloomberg U.S. Corporate 1-5 Year Index. The fund was paying 4.1% in early 2026.
6. Guggenheim Total Return Bond Fund
A total return bond fund is not your average bond fund . This kind of bond fund makes money from coupon payments and from rising bond values. This may happen either because rates decrease, which is normally set by central banks and macroeconomic factors, or because the fund holds bonds whose credit ratings improve, leading bond prices to increase and yields to fall.
The Guggenheim Total Return Bond Fund has around 1,930 bonds, from Treasuries and municipal bonds to corporate bonds. It gave 5.1% as of early 2026.
7. Vanguard Total International Bond Index Fund
If you’re seeking diversification away from bonds, you don’t have to remain inside U.S. borders. Emerging economies are among the best places for high-yield investors to look, so consider foreign bonds like the Vanguard Total Foreign Bond Index Fund.
The fund’s largest assets are European government bonds, but it has more than 6,600 bonds, most of which are investment-grade. It follows a Bloomberg index, modified to remove U.S. bonds, and it yielded 3.2% in early 2026.
8. Fidelity Short-Term Bond Fund
Short-term corporate bonds aren’t the only short-term bonds you can buy if you like them. The Fidelity Short-Term Bond Fund is one of the top short-term bond funds out there, and it invests in short-term Treasury bills and corporate bonds from corporations like banking giants Bank of America (BAC -1.60%), JPMorgan Chase (JPM -1.60%), and Wells Fargo (WFC -3.18%).
The fund is managed to have a comparable overall interest rate risk as the Bloomberg Barclays U.S. 1-3 Year Government/Credit Bond index and seeks to maintain a dollar-weighted average duration of three years or less. In early 2026, it was 3.7%.
How to choose the best bond
There are several types of bonds available to investors. You may buy U.S. government bonds, corporate bonds (investment grade and trash), or overseas bonds. Investors may purchase bonds directly in their brokerage accounts or invest in a bond fund.
(ETF or mutual fund). With so many options, it can be hard to choose the best bonds to buy.
Here are some factors to consider:
- Active or passive: Do you want to actively manage a portfolio of personally owned bonds or passively invest in a bond fund?
- Maturity: Bonds with shorter maturities are less susceptible to interest rate changes than bonds with longer maturities. But long-term bonds frequently carry higher interest rates.
- Issuer: Examples of bond issuers include the U.S. government and investment-grade companies. The risk is smaller than that of certain foreign governments or an entity with a non-investment-grade credit rating.
- Tax: Some bonds are tax-advantaged. For instance, federal government bonds are normally exempt from state and local income taxes. Municipal bonds, however, are exempt from federal taxes and state taxes in the state where the bond was issued.
- Fees: Understand the fees when you purchase a bond mutual fund or ETF. A high-cost fund might eat into the interest income generated by the bond holdings.
Which type of bond is right for you?
Here’s how you can determine the most suitable type of bond for their portfolio based on your risk tolerance:
- Conservative and more risk-averse: Best for a conservative investor would be treasury bonds, as well as high-quality investment-grade municipal and corporate bonds.
- Moderate risk tolerance: For a moderate investor, a mix of Treasuries, municipal bonds, investment-grade bonds, and high-yield bond funds would be the ideal balance of risk and returns.
- More aggressive, risk-tolerant: Lower-rated corporate, developing-market, junk, and convertible bonds offer higher income and total-return opportunities for risk-tolerant investors.
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