What are the best bond ETFs for beginners?

BND and AGG are excellent choices for beginners. They offer broad exposure to the U.S. bond market and have low fees.

Should I buy bond ETFs in 2025?

If you’re looking for income and stability in a diversified portfolio , bond ETFs can be a solid addition -- especially with current yields.

Do bond ETFs pay dividends?

Yes, bond ETFs pay dividends monthly or quarterly based on the interest from the underlying bonds.

They’re generally considered lower risk than stocks, but they can still fluctuate with interest rates and economic changes.

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Best Bond ETFs To Invest In Now

May 27, 2025

5 min Read

Written by Aja McClanahan

Edited by Joe Evans

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Looking to add stability and reliable income to your portfolio? Bond ETFs can be a smart way to diversify your investments, manage risk, and generate steady returns — especially in uncertain markets.

Whether you’re a cautious investor seeking consistent income or someone looking to balance out a stock-heavy portfolio, the best bond ETFs can help you build a more resilient strategy.

This guide breaks down the top-performing and most popular bond ETFs for 2025, how they work and what you need to know before investing.

Best Bond ETFs to Buy Now in 2025

Here’s a quick look at the best bond ETFs available this year:

ETF	Ticker	Expense Ratio	Yield (SEC)	One-Year Return	Key Feature
Vanguard Total Bond Market ETF	BND	.03%	~4.5%	+3.2%	Broad U.S. bond exposure in one fund
iShares Core U.S. Aggregate Bond ETF	AGG	.03%	~4.5%	+3.1%	Tracks U.S. bond market benchmark
iShares 20+ Year Treasury Bond ETF	TLT	.15%	~4.1%	+2.8%	Focused on long-term U.S. Treasuries
SPDR Bloomberg 1-3 Month T-Bill ETF	BIL	.14%	~5.0%	+4.9%	Ultra-short-term, low-risk bonds
iShares iBoxx $ Investment Grade Corporate Bond ETF	LQD	.14%	~5.2%	+4.4%	Investment-grade corporate bonds

Bonus Pick: Schwab U.S. TIPS ETF (SCHP)

Focus: Inflation-protected U.S. Treasury bonds
Why It’s a Pick: Helps protect purchasing power when inflation rises

Why Invest in Bond ETFs?

Bond ETFs give you instant access to a basket of bonds — without needing to buy individual bonds or manage maturity dates. Here’s why investors love them:

Diversification: Spread your risk across many issuers and bond types
Steady Income: Earn regular interest (known as yield) while your money works
Lower Risk: Bonds are generally less volatile than stocks
Accessibility: Trade bond ETFs like stocks, with lower minimums

Bond ETFs vs. Other Investment Options

Not sure if bond ETFs are the right fit? Here’s how they compare:

Investment Type	Risk Level	Growth Potential	Income Potential	Liquidity
Bond ETFs	Low-Medium	Low-Moderate	Moderate	High
Stock ETFs	Medium-High	High	Low-Moderate	High
CDs	Low	Low	Moderate	Low (fixed term)
Individual Bonds	Low-Medium	Low	Moderate	Medium (must hold to maturity)

Bond ETFs strike a balance: they’re less risky than stocks but offer better liquidity and diversification than individual bonds or CDs.

Risks of Investing in Bond ETFs

While bond ETFs are often seen as safe, they’re not risk-free. Here’s what to watch out for:

Interest Rate Risk: Bond prices can fall when interest rates rise.
Credit Risk: Corporate and high-yield bonds may carry a risk of default.
Inflation Risk: If inflation rises faster than bond yields, your returns lose purchasing power.

Trends Shaping Bond ETFs in 2025

Here’s what’s driving the bond market this year:

Interest Rates: The Federal Reserve’s rate decisions continue to impact yields.
Inflation: Investors are watching for signs of rising or cooling inflation.
Economic Slowdown Fears: Bonds tend to shine when the economy slows down.
Growing Popularity: More investors are adding bond ETFs for stability.

How to Buy Bond ETFs

Getting started with bond ETFs is easier than you might think. Here’s how:

Open a Brokerage Account: Popular platforms include Fidelity, Schwab, Vanguard and Robinhood.
Search for ETF Tickers: Use the tickers listed in this article (e.g., BND, AGG, TLT).
Review Key Data: Check the yield, expense ratio and what types of bonds are included.
Decide How Much to Invest: Start small or set up recurring purchases for long-term growth.
Stay Diversified: Consider adding bond ETFs alongside other investments.

Final Take to GO

The best bond ETFs in 2025 offer a great way to add income, reduce risk and diversify your portfolio.

Whether you’re saving for retirement, looking for steady income or just want to balance your stock holdings, these ETFs can help you reach your financial goals.

Ready to get started? Research your options, pick a fund that matches your risk tolerance and goals and consider adding bond ETFs to your investment strategy today.

For more tips, check out our guides on how to buy ETFs, beginner investing tips and how to build a diversified portfolio.

FAQs About Bond ETFs

Learn more about the best bond ETFs so you can make an informed decision about whether or not to include them in your portfolio.

What are the best bond ETFs for beginners?
- BND and AGG are excellent choices for beginners. They offer broad exposure to the U.S. bond market and have low fees.
Should I buy bond ETFs in 2025?
- If you’re looking for income and stability in a diversified portfolio, bond ETFs can be a solid addition -- especially with current yields.
Do bond ETFs pay dividends?
- Yes, bond ETFs pay dividends monthly or quarterly based on the interest from the underlying bonds.
Are bond ETFs safe?
- They’re generally considered lower risk than stocks, but they can still fluctuate with interest rates and economic changes.

Data was compiled on May 27, 2025, and is subject to change.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

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