System availability and response time is subject to market conditions.
When calculating the final dollar amount to purchase TIPS, investors will need to use the price that has been adjusted for the Inflation Factor. Semiannual coupon payments for a given par amount of TIPS are calculated by multiplying the inflation-adjusted principal by the coupon rate.
Interest income generated by Treasury bonds and certain securities issued by U.S. territories, possessions, agencies, and instrumentalities is generally free from state income tax but is generally subject to federal income and alternative minimum taxes and may be subject to state alternative minimum taxes. Short- and long-term capital gains and gains characterized as market discount recognized when bonds are sold or mature are generally taxable at both the state and federal level.
Any fixed income security including CDs sold or redeemed prior to maturity may be subject to a gain or loss.
In general, the bond market is volatile, bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities.
Prices and yields are posted prior to the assessment of the Fidelity Brokerage Services LLC (“FBS”) markup or markdown. The FBS markup or markdown will be applied for customer review prior to placement of the order. Bonds are made available through our affiliate National Financial Services LLC ("NFS") and from various third-party providers, including participants on the BondDesk platform, with FBS normally acting as riskless principal or agent.
The offering broker, which may be NFS, may separately mark up or mark down the price of the security and may realize a trading profit or loss on the transaction.
As your bond order is routed, NFS, through which all purchase orders for fixed income securities are routed through may fulfill your purchase order for secondary Municipal, Corporate and Agency bonds as principal. If NFS executes your purchase order, rather than routing it to another market, it will have determined that your order would receive price improvement compared to an execution through the secondary market. Price improvement is defined by NFS as the Buy order being executed at a lower price than the Ask price displayed on Fidelity.com. NFS reviewing an order is not a guaranty of either execution or price improvement. NFS may route to the originator of the offering on Fidelity.com. That offering may not be available at that time.
The information provided herein is general in nature and should not be considered legal or tax advice. Fidelity does not provide legal or tax advice. Consult with an attorney or tax professional regarding your specific legal or tax situation.
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