How to Invest in Bonds Online

In recent weeks, the stockmarket has started to slump. It's a time when investors are beginning to panic and that means that mass sell-offs are happening in almost every industry imaginable. A bear market seems inevitable, and that means it's time to prepare for an economic downturn.

The easiest way to weather the storm is to lose all the most dangerous investments you've made and to opt for low-risk investments that offer decent returns. The most solid form of investments you can choose during these times often are bonds—and now, they are some of the easiest investments to make.

Thanks to tech updates, you can now invest in bonds online. Here's how to do it without having to waste time, extra money, or deal with awkwardness.

One of the easiest ways to invest in bonds online is to go to TreasuryDirect, the US government's own route to let citizens make online investments. The bonds featured are backed by the government and can be purchased for as little as $25.

TreasuryDirect's biggest pull is the amount of education it offers new investors, as well as the wide range of different bonds and securities it offers. Some bonds mature in as little as 45 days, while others will take years.

It's a great choice for anyone who wants to make more bond investments.

That being said, not all items on TreasuryDirect are bonds.

Though TreasuryDirect tends to be one of the most popular ways to invest in bonds online, it's worth pointing out that they are notstrictly limited to bonds. Some of the items that they have up for grabs include securities like Treasury Notes, Treasury Inflation-Protected Securities (TIPS), and Floating Rate Notes.

So, if you're trying to make online investments and are not interested in any other securities, make sure what you're buying on this site (and others) are actually bonds.

Governments are not the only issuers of bonds, you know! Companies are allowed to issue out their own bonds, as long as they are compliant with SEC regulations. Company-offered bonds operate by similar rules to government bonds in terms of maturation and having their own credit scores.

Companies that offer their own bonds also have the added perk of giving you discounts in the form of no trader fees. For savvy investors who keep a close eye on the market, this might be a good choice.

Here's what you need to know about investing in company bonds via sites that aren't brokerages.

Though it may seem like a better route, investing in bonds online through non-brokerage sites does have its pitfalls. Some scammers will create sham company sites offering bonds and investment opportunities, solely because they want to take the money and run.

Corporate bonds aren't always too good. They can be rated as "junk bonds," and if the company fails, you will lose all the money you put in. Additionally, if you want to have all your investments at your fingertips, this may not be a good choice for you. You might even forget to cash your bonds in!

If you have a retirement fund, then you already know that you have some control over what you invest in. It's totally okay to ask the company that manages your 401(k) to invest in bonds for you—and many 401(k) companies will allow you to request that change online.

Even people who have Roth IRAs can exercise control over their investments by buying up bonds through their IRA's platform. If you have an app that allows you to touch up your retirement account through it, this could be an effortless way to beef up your bond investments.

Here's what you should know about choosing to invest in bonds online via your retirement accounts.

The issue many people have here is that you can't really decide to invest that money elsewhere once it's been invested. Investment accounts are rigid like that, and if you were looking to use the money you're investing soon, this route is a poor idea.

For most people, just hitting up your online brokerage account or your online broker app could be one of the easiest ways to invest in the bonds of your choice. All you have to do is log onto your app, search for the bonds you want to invest in, and buy them up.

This is a great choice for people who need to have all their investments at their fingertips. People who enjoy investing via their cell phones will love this route because it's simple and works with their lifestyle.

Of course, there are some caveats to choosing to invest through your brokerage accounts too.

Though brokerage accounts are the most popular ways to invest in bonds online, it's important to understand that there are drawbacks. Not all brokerages are connected to the bond market, and that means you might have to open an account elsewhere to do it.

Fees can also eat into your bond prices, and since brokerages don't always screen bonds very well, it's possible that you might find bonds that are far riskier than you should want to invest in.

As the rise of "hands off" investing continues to climb, more people than ever are allowing top-rated robo-advisors to make the big decisions for them. If you want to invest in bonds, but just feel too "green" for making the decision yourself, you may want to consider a robo-advisor like Betterment.

Robo-advisors are generally good if you're okay with not having control over how you invest in bonds online.

There's always a catch, right? If you use a robo-advisor, chances are high that you won't be able to fully dictate what you would invest in. However, for many people, that "set and forget" vibe is exactly what the doctor ordered.