Which bond gives the highest return?

Bonds with non-investment-grade ratings (also called junk bonds) typically offer the highest return potential. They tend to offer a higher fixed-income yield than investment-grade, municipal, and government bonds. In addition, they offer some appreciation potential if the underlying company receives a credit rating upgrade, making the bonds less risky. Convertible bonds (bonds that can convert into stock) also have high return potential if the value of the company's shares rises.

What bonds make you the most money?

Non-investment-grade bonds (i.e., junk bonds) have the potential to make the most money from their higher yields. However, they have a higher risk of default. In addition, convertible bonds (i.e., bonds that can be converted into stock) can also be big moneymakers if the underlying stock delivers significant price appreciation.

What type of bond is the best to buy?

The best type of bond to buy is a U.S. Treasury bond. They're virtually risk-free investments backed by the U.S. government.

Are bonds suitable for retirement or income-focused portfolios?

Bonds are ideally suited for retirement and income-focused portfolios. They're lower-risk investments than stocks, increase a portfolio's diversification, and provide a relatively stable income stream.

8 Best Bonds to Invest in for the Long term (2026)

Learn about the best ways to invest in bonds.

By Matthew DiLallo – Updated Mar 13, 2026 at 3:12 PM EST | Fact-checked by Frank Bass

Key Points

Bonds provide a stable income source through interest and can increase in value when interest rates fall.
Investing in a variety of bonds, including T-bills and corporate bonds, helps diversify risks.
Bond ETFs like LQD and BNDX offer easy access to diverse bond markets with decent yields.

A bond is a loan made to a government entity or company with a set interest rate and maturity date. Many investors buy bonds to help reduce risk, diversify their portfolio, and generate interest income.

In addition to that guaranteed fixed-income return, bonds offer some other advantages in a high-interest-rate environment. For example, if interest rates fall, the price of a bond goes up, and you can make money selling your bond rather than holding it until maturity.

If interest rates remain elevated, more investors are likely to turn to bonds to earn a reliable return. That includes bond funds and bond exchange-traded funds (ETFs), as well as options such as corporate bonds and municipal bonds. If you want to invest in bonds, keep reading to see some of the best bonds and bond funds you can buy today.

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Source: CNBC, Treasury Direct, and company websites. Note: Yields as of Feb. 13, 2026.

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1. 10-year Treasury note

If you're looking for a straightforward bond investment, it's hard to beat Treasuries. U.S. Treasury bonds are considered the safest in the world and are generally regarded as risk-free. The 10-year rate is a benchmark used to determine other interest rates, including mortgage rates, auto loan rates, student loan rates, and credit card rates.

Treasury yields are closely tied to the federal funds rate, so they are likely to move in step with the Federal Reserve's rate adjustments.

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2. 26-week Treasury bills (T-bills)

If you're looking for a place to park your cash short-term, T-bills are the gold standard. The U.S. government issues these shorter-duration securities. They differ from Treasury notes and bonds in that they don't pay interest. Instead, the U.S. Treasury sells T-bills at a discount and redeems them at their face value at maturity.

The Treasury sells T-bills that mature in four-, six-, eight-, 13-, 17-, 26-, and 52-week terms. The 26-week term is a popular option because it typically offers a higher interest rate than shorter-term notes.

3. iShares iBoxx Investment Grade Corporate Bond ETF

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NYSEMKT: LQD

iShares Trust - iShares iBoxx $ Investment Grade Corporate Bond ETF

Today's Change

(-0.54%) $-0.59

Current Price

$108.71

Key Data Points

Day's Range

$108.70 - $109.32

52wk Range

$103.45 - $112.93

Volume

60M

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Investment-grade corporate bonds tend to offer higher yields than government bonds. While they're not "risk-free" like 10-year Treasury notes, they tend to be lower-risk bonds backed by companies with investment-grade bond ratings.

The iShares IBoxx Investment Grade Corporate Bond ETF makes it easy to invest in high-quality corporate bonds. This bond ETF provides access to over 3,050 investment-grade bonds through a single fund. This bond fund offered a yield of more than 4.5% in early 2026.

4. Vanguard Tax-Exempt Bond ETF

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NYSEMKT: VTEB

Vanguard Municipal Bond Funds - Vanguard Tax-Exempt Bond ETF

Today's Change

(-0.14%) $-0.07

Current Price

$50.27

Key Data Points

Day's Range

$50.26 - $50.35

52wk Range

$47.02 - $51.18

Volume

8.4M

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State and local governments issue municipal bonds to fund their operations and projects. They offer investors a way to earn interest income with the added bonus that the interest is exempt from federal taxes.

The Vanguard Tax-Exempt Bond ETF tracks the performance of investment-grade municipal bonds. The fund holds roughly 9,950 securities and offered a yield of about 3.3% in early 2026.

5. Vanguard Short-Term Corporate Bond Index Fund

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NASDAQMUTFUND: VSCSX

Vanguard Scottsdale Funds - Vanguard Short-Term Corporate Bond ETF

Today's Change

(0.09%) $0.02

Current Price

$21.60

Key Data Points

Day's Range

$21.60 - $21.60

52wk Range

$21.60 - $21.60

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Short-term bonds offer some advantages over long-term bonds, depending on your investing needs. Because of the shorter duration of short-term bonds -- considered to have maturities of five years or less -- they have less interest rate risk and are more likely to preserve the principal.

The fund holds over 2,700 bonds from a range of blue chip companies such as Bank of America (BAC -0.95%), CVS Health (CVS -2.38%), and AbbVie (ABBV -5.13%). It aims to track the Bloomberg U.S. Corporate 1-5-Year Index. The fund offered a yield of 4.1% in early 2026.

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6. Guggenheim Total Return Bond Fund

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NASDAQMUTFUND: GIBIX

Guggenheim Funds Trust - Guggenheim Total Return Bond Fund

Today's Change

(0.17%) $0.04

Current Price

$24.01

Key Data Points

Day's Range

$24.01 - $24.01

52wk Range

$24.01 - $24.01

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A total return bond fund differs from a typical bond fund in that it generates returns through both coupon payments and rising bond prices. This can happen either because yields fall, which is generally determined by central banks and macroeconomic forces, or because the fund owns bonds whose credit ratings improve, causing the bond values to rise and yields to fall.

The Guggenheim Total Return Bond Fund owns a range of around 1,930 bonds, including Treasuries, municipal bonds, and corporate bonds. It yielded 5.1% as of early 2026.

7. Vanguard Total International Bond Index Fund

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NASDAQ: BNDX

Vanguard Charlotte Funds - Vanguard Total International Bond ETF

Today's Change

(-0.39%) $-0.19

Current Price

$48.11

Key Data Points

Day's Range

$48.10 - $48.24

52wk Range

$48.00 - $49.93

Volume

3.7M

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If you're looking for diversification from your bonds, there's no reason to stay within U.S. borders. Emerging markets can offer some of the best opportunities for high-yield investors, so it's worth considering international bonds like the Vanguard Total International Bond Index Fund.

The fund's top holdings are European government bonds, although it holds over 6,600 different bonds, largely investment-grade. It tracks a Bloomberg index adjusted to exclude U.S. bonds, and it offered a yield of 3.2% in early 2026.

8. Fidelity Short-Term Bond Fund

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NASDAQMUTFUND: FSHBX

Fidelity Salem Street Trust - Fidelity Short-Term Bond Fund

Today's Change

(0.00%) $0.00

Current Price

$8.49

Key Data Points

Day's Range

$8.49 - $8.49

52wk Range

$8.49 - $8.49

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If you're interested in short-term bonds, you don't have to limit yourself to corporate bonds. The Fidelity Short-Term Bond Fund -- one of the best short-term bond funds available-- invests in both short-term Treasury bills and corporate bonds from companies such as financial giants Bank of America, JPMorgan Chase (JPM +0.27%), and Wells Fargo (WFC -0.05%).

The fund is managed to have a similar overall interest rate risk to the Bloomberg Barclays U.S. 1-3 Year Government/Credit Bond index and aims for a dollar-weighted average of three years or less. It yielded 3.7% in early 2026.

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FAQ on investing in bonds

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About the Author

Matt DiLallo has been a contributing Motley Fool stock market analyst specializing in covering dividend-paying companies, particularly in the energy and REIT sectors, since 2012. He also covers pre-IPO companies, ETFs, and other investing topics. He holds an MBA from Liberty University.

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@MatthewDiLallo

Bank of America is an advertising partner of Motley Fool Money. Wells Fargo is an advertising partner of Motley Fool Money. JPMorgan Chase is an advertising partner of Motley Fool Money. Matt DiLallo has positions in JPMorgan Chase. The Motley Fool has positions in and recommends AbbVie and JPMorgan Chase. The Motley Fool recommends CVS Health. The Motley Fool has a disclosure policy.