How to Trade Bonds on Trade Republic for Beginners

Trade Republic have introduced fractional bond investing to their platform. With Trade Republic, you can now invest in over 500 liquid Government and Corporate bonds. This video seeks to explain bond investing as well as how to invest in bonds using Trade Republic.

Overview 0:00
Bond Basics 2:15
Bond Prices & Rates 6:13
Bonds on Trade Republic 13:15

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*Malone Financial is affiliated with the aforementioned companies. Malone Financial receives a commission for any customer conversions realized via the affiliate links. This video includes my own opinions (which do not reflect the opinions of said companies). Investing involves a risk of loss. Nothing mentioned in this video should be construed as financial advice.

[MrJakemaccarthy]

Thank you Dan. A very good video as always. I must watch again to fully understand it all. One element that would be good to include in a future video would be worked examples including taxes to be applied. Tax on interest payments (annual and interest at maturity) vs no tax on capital gain with bond value if you buy below par. Also you mentioned no tax on capital gains, is that just on Irish bonds as an Irish resident or all government bonds on Trade Republic (Germany, France ones etc)??

[thomaskreisel]

If James buys a Bond, his bond will be called, James Bond

[geoffroyhatty]

Could you please explain this " Irish government bonds are tax free on any capital gains that arise on maturity or disposal for Irish resident investors. Any interest income or coupons are taxed at the investors marginal rate of tax. " If I invest in an Irish bond (as an Irish tax resident) until the end (maturity), do I owe any tax on the interest made ?

[funpeopleful]

Great video Dan! Can I ask you if you can share another way or more convenient way to buy Irish Government bonds other than Trade Republic?

[johnmc]

What the difference between bonds and EFT’s?

[pivecvid]

Hello! I have a trade republic account. I opened it mainly for long term ETF investing and because they are pasing the whole ECB interest rate to their customers. I find it to be the best EU platform for non institutional investors. But I do not quite understand the bond vocabulary they use. It is not totaly the same as you were explaining. They have the term "annual return" - is this the same as yield or yield to maturity? And they also use quoatation. For example 89% - is this a discount to par? For now as the ECB interest rate is high I will just leave some money on the cash account, but in future when they fall I would like to be ready to also invest in bonds. Best regards, Vid

[mrseaweed]

Thanks Dan, I had to watch it a couple of times to fully understand everything but this video was really helpful. I wasn’t factoring in accrued interest when I first started looking at bonds on TR, particularly short term bonds. I foolishly assumed it was like holding a stock on the ex-div date!

A couple of quick questions for you if you can help. You mentioned around 11:50 that in Ireland, capital gains on government bonds are exempt from CGT. Is that just bonds from the Irish govt or any govt bonds? Also, would that gain still need to be reported on the following year’s tax form? Thanks again!

[beslandaur]

I want to thank you for your effort but the way you explain it is SOOO hard to digest.
I mean I can go and read it on google the same way, but I’m looking for someone who can explain it in simple ways

[DrScully]

So if I buy a bond with a 4% yield for 12 months, my initial investment (minus 1 EUR) will be paid back, but the 4% could change overtime? Is there a chance I will get negative interest or absolutely no interest even when paying at the time it reads 4%? Thanks Dan!

[louisacarroll]

Hi Dan, if you buy a zero coupon bond that is highly discounted and hold until maturity, does that mean that the proceeds less the purchase cost is all capital gain and is taxed as CGT? Also once you have bought the bonds and don’t sell, at maturity do you have to do anything or will it all happen automatically on Trade Republic that the bond will turn into cash?
Thanks for all your help.

[MrBucko]

@Malone if you’re buying Irish Gov bonds for the CGT exemption don’t you also have an annual CGT exemption to utilise across any assets? Something to consider say if someone has over €50k to deposit and wants to earn interest on the balance above €50k on TR without investing long term with its risks?

[UllasKarkera]

Can we place limit order for bonds… given bid and ask are very wide

[MrChando]

Are bonds safe to invest in? How do you look for safe bonds?

[adriant]

What do you think about Money Market Funds to get low risk returns?

[thomasweber]

How are my bonds at trade republic (Your position - Total) valued?

[andrewhealy]

So if you buy at discount, do you always earn the percentage discount back as a type of capital appreciation? Ie, trade republic have an irish government bond at a quotation of 90%. Does this mean a 10 tax free capital gain as well as the 3.06% coupon per year?

[briandoran]

I like dans videos, his advice in vanguard etf euro equivalent was very helpful.
But why bother with bonds when trade republic pays 4% anyway

[borjaruiz]

Thank you Dan for this great informative video. So I guess this means, if I invest on a Bond that I plan to keep until maturity, and leaving other factors on the side such as risk of default, I am guaranteed to get a yearly interest equal to current value of yield to maturity, regardless of price fluctuations on the market. Is that correct? Thank you.

[thomaskreisel]

So Bonds behave similar to dividend Stocks? You can trade them, buy low and sell high, and you get a little Bonus, these 2-4%... Do I got it right?

[declanmcardle]

Aren't the coupon rates on bonds inversely related to (CB) interest rates? So, now wouldn't be the best time to invest? Also, historical bonds invested in 2 or 3 years ago would be getting a hammering at the moment?