Services & Costs

Services and Costs

Low Transparent Costs:
1. Electronic Buy Transactions
  1. For buy transactions of 20 bonds or more from the Shop4Bonds systems whether electronic or with telephonic assistance there are no stated execution fees. Rather there will a reduction in the yield offered by the dealer as follows:
    - Deduct 10 basis points (or 10/100ths of 1.0%) in yield for bonds longer than 8 years in maturity
    - Deduct 15 basis points (or 15/100ths of 1.0%) for bonds from 4 to 8 years in maturity
    - Deduct 20 basis points (or 20/100ths of 1.0%) in yield for bonds shorter than four years
    Example: Suppose a bond on our Shop4Bonds System is offered at 6.35%. If it is longer than 8 years, you receive a yield of 6.25%. If it is between 4 and 8 years, you receive a 6.20%. If it is shorter than 4 years and you receive a 6.15% yield to maturity.
    
    To compare our prices with others, now all you have to do is compare our net yield to maturity (or yield to call) with our competitors and ignore their claims of low execution charges. If our competitors are offering a net yield of 6.10% and we are at a net yield of 6.25% (after our yield based execution fee) then we are 15 basis points better. It is just that simple!
  2. Bonds offered with a yield to maturity of higher than 8.0% will receive the basis point pricing based on an 8.0% yield to maturity.
  3. There is a 10 bond minimum and a minimum flat fee of 1.0% of Principal Amount for fewer than 20 bonds. For all orders the minimum fee is $100.
  4. We may discount orders greater than $100,000 face amount and special handling fees may be applied.
  5. Convertible bonds, commodity based issues, and derivative bonds will have special pricing.
2. For Electronic Sell Transactions there is a basic fee of $7.50 per $1,000 bond. This fee may be discounted for larger orders and special handling charges may be applied. For all orders there is a minimum fee of $100.
3. For special offerings and Buys or Sells handled through one our of our Investment Specialists bonds will be offered at a net price with a customary mark-up.
4. For bonds we own prior to sale to you, we may have a profit or loss based on market conditions.
5. Other Situations. Most people are familiar with transactions in the bond market as either buying or selling a security. While these encompass most transactions, from time to time other transactions occur which require investors to make an informed decision. An example are tender offers where either the issuer or some other party offers to purchase your bonds against some set of particular terms, conditions and time frame. A tender offer often requires a continuous, time consuming daily interaction among the bondholder, his broker, the tender offer advisor and the tender agent. Tender offer terms often are changed on a daily and even an hourly basis. Consequently these offers require extra effort by us to be sure that timely information is delivered to you and may require our analyzing particulars and giving advice as to help you make an informed decision. There are also other situations which may require similar attention on our part. For these types of transactions, we charge a fee of $7.50 per bond or a minimum of $150.00 upon completion of the transaction.
6. There are other incidental institutional costs common throughout the securities industry. At Shop4Bonds, we have found ways to help our customers manage these costs to a minimum level:
  - Account Maintenance: There is a basic cost to maintaining a viable securities account for you, for this we charge all accounts a basic fee of $39.00 per year billable in late June each year. This is very competitive with other low cost on-line brokerage systems. We will waive this fee for all customers that do at least two trades per year.
  - Automated Customer Account Transfers (ACATs): When you ship your securities to another firm, it require people's time to review and execute the transaction. Consequently there is a charge of $60.00 per outgoing ACAT transfer. This applies to one security or multiple securities. Therefore, we recommend that you only ACAT your securities infrequently. We will waive the ACAT charge any time you transfer securities purchased through us with a total value of $150,000 or more.
  - Paper Statements: Paper statements mailed to you incur a fee of $1.00 per statement. This fee is not charged if you receive your statements by email through Edocs. Please go to call your representative, or click here to sign up for Edocs.
  - Late Payment: When for any reason your payment does not arrive by Settlement Date, we still must pay for your securities that day. Consequently, until we receive the funds from you we incur borrowing costs. We pass these costs on to you. Using our automated check payment function is the easiest way to avoid these costs.
7. Changes: J W Korth/Shop4Bonds reserves the right to make changes to the pricing of its services at any time without prior notice to customers. Customers will be notified of trade pricing at the time they place their trade.
J W Korth/Shop4Bonds Services:
1. Lowest Priced Inventory: No one has lower priced inventory because we show the inter-dealer prices to all our clients. We charge straight forward execution fees (see below) for buying and selling your bonds, and we have extensive bond market experience among our principal professionals.
2. World's Leading Bond Inventory: With our Shop4Bonds^SM Alpha and Beta platforms, we show the inter-dealer market offerings from over 400 dealers, banks and institutions. The use of multiple platforms on one website makes us the largest inventory in the world and we have filed a provisional patent in this regard.
3. Don't Be Misled by Other Dealers Claims of Low Fees: Use our Test Drive and compare real offerings and follow our Price Comparisons Advice and you will quickly be convinced this is the best place to buy bonds.
4. Bond Values Research: We are continually searching the bond markets for values. During the course of trading we become aware of interesting situations. When we feel it is appropriate, we pass this valuable information on to you by special e-mails. Subscribe.
5. Responsive Online Execution: On both our Alpha and Beta systems we offer and encourage the use of the Electronic ordering feature. It saves you time because you can order bonds anytime and you don't have to wait for us to call you to tell you about your executions.
6. Free Test Drive: You can take a one time test ride of our system for 14 days by simply giving us your name and email address and agreeing to receive our Bond Values Research. (Free Test Drive)
7. Easy On-Line Account Opening: It takes just 8 minutes to fill out an application. Click Here.
8. Free Electronic Check Payment: We offer the easiest and cheapest means to add money to your account or pay for bonds. Click on the Money Transfer menu item and you can securely pay for your bond purchases. We offer this service free of charge. This can save you time and wire fees of up to $50.00 per transaction.
9. Depository Trust Company Delivery: Want to trade with us and consolidate your accounts elsewhere? We accept securities and deliver securities pursuant to your instructions via book entry DTC delivery. Delivery to us is free. Delivery to other dealers is just a $10.00 fee. Call or email us us to get a DTC Delivery Form.
10. Online Bond Account Statements and Account Viewing: Through our clearing partner ADP Clearing & Outsourcing Services, Inc., you will receive online statements and on-line viewing of your account.
11. Shop4Bonds Log Ons: There is a basic cost to providing you with Shop4Bonds system. Consequently, the System is set to automatically favor those customers who are actively trading securities through us. Therefore it is possible after a long period of no trade activity, you might receive a "Please call 1-800-454-1628 to have your log on reset".