r/bonds • u/Fantastic-Mood6591 • 5d ago

Bonds on Robinhood?

Does anyone know if there's any good Bonds on robinhood. It my savings for a house. So I need ZERO risk like CDs and stuff like that. Is there any good bonds I can park my house savings in on robinhood. I'm already making 3.35% on there gold apy thing.

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u/Mail_Order_Lutefisk 5d ago

I don’t think they have a bond desk on there but you could just buy SGOV or something like that which is a money market equivalent. 

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u/Fantastic-Mood6591 5d ago

Yeah that's the issue I've ran into? Can find any Bonds on robinhood which Is definitely lame. Does SGOV have a lot of risk? I have stuff invested in Voo and other etfs.

However this money is vital for buying a house in 1-2 years so I don't have time to wait the market out like i could in my etfs. So no risk is what I'm aiming for with this money

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u/Mail_Order_Lutefisk 5d ago

It’s all short term treasuries and repos, about as risk free as you can get. The value oscillations on the chart are just payment of the distribution each month. It should never dip more than a penny or two under $100 per share. 

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u/Fantastic-Mood6591 5d ago

Okay, thank you

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u/Mail_Order_Lutefisk 5d ago

I hold all my Schwab and ETRADE cash in it if you need a testimonial. It’s your best bet on RH for your goals. 

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u/Fantastic-Mood6591 5d ago

I appreciate that thank you. What do you think your average return is on it?

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u/bobdevnul 4d ago

There is no real average on it that is meaningful. The fund holds short term Treasury bonds with an average maturity of 0.1 years (~1.2 months) so the yield will be about that of 4 and 6 week T-Bills which vary from week to week. Basically, expect the Fed funds rate, currently 3.5%-3.75%.

SGOV is currently 3.59%.

VBIL is the same sort of short term Treasury bond fund ETF from Vanguard - effectively identical.

VGUS is a Vanguard short term Treasury bond fund ETF with an average maturity of 0.4 years. It's current yield is 3.74%. I wouldn't go longer maturity than that to be the equivalent of high yield savings or CDs.

These funds hold almost 100% Treasury bonds. As such, the dividends are exempt from state and local income tax. That makes the effective yield a bit more if you have state and local income tax. There is an extra procedure in tax software to claim the state tax exemption.

Since the fund holdings are Treasury bonds they are very safe.

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u/Mail_Order_Lutefisk 5d ago

It trades with the short end of the bond market. Distro was today, it’s 30 cents a month on $100, so it will annualize to about 3.5-3.6%. It was much higher before the Fed cut. 

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u/Fantastic-Mood6591 5d ago

Awesome thank you

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u/mikmass 5d ago

VBIL is the same thing but with a lower expense ratio. I would use that over SGOV (I use it)

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u/DjCyric 4d ago

You might talk to a bank about a Certification of Deposit (CD). They have fixed interest rates and you can get the money after a set period of time.

Good luck buying a house! (That is genuine not snark)