I just realized an interesting thing – most people when talking about stock investments only think of shares, but bond money (bonds) is actually a safe option that many overlook. Especially when the corporate bond market in Vietnam has grown an average of 35% annually from 2016-2020, but many investors still do not fully understand how it works.

Actually, what bond money is quite simple – it’s a debt certificate. When you buy a bond, you are not the owner of the company (like with stocks), but a lender. The company or government will pay you a fixed interest rate periodically, and when it matures, you get back your original principal.

The good thing here is safety. Government bonds are extremely low risk because they are guaranteed by the state. Corporate bonds offer higher interest rates, but of course, they also carry relatively higher risk. I see many young people getting caught up in stocks hoping for quick profits, but if you have some idle money and want to keep it safe, bonds are a more reasonable path.

In practice, buying bonds in Vietnam is not complicated. You just need to open an account with securities companies like VPS, MBS, Vndirect, or SSI. There are two main ways: direct investment (signing a contract, transferring money, receiving a certificate) or investing through a fund (buying fund certificates, more flexible). If investing directly, you need about 100 million VND; through a fund, from 5-10 million VND is enough.

One thing to note is the fees. Besides the interest, you will have to pay personal income tax, transfer fees, fund management fees (if investing through a fund), and possibly early sale penalties. All these add up and will affect your actual profit.

When choosing bonds, I recommend prioritizing reputable organizations – the government, large banks like Techcombank, Vietinbank, Vietcombank, HDbank. If choosing corporate bonds, carefully research the financial situation, leadership, and whether the company has been audited by major firms.

There are three main risks you need to know. Credit risk is when the company cannot pay interest or principal (recently there was the An Đông Company, Vạn Thịnh Phát Group causing market shock). Prepayment risk is when bonds are paid off earlier than expected, significantly reducing interest income. Lastly, interest rate risk – if market interest rates change, your bond’s value will also be affected.

Compared to stocks, bonds offer stable but lower returns. If you are a new investor, with moderate capital, and want to sleep well at night without worries, bond money is a worthy choice. But if you want higher profits and can tolerate volatility, stocks will be more suitable. It all depends on your financial goals and risk appetite.