An alloy for bonded magnets of the present invention includes at least a main component of iron (Fe), 12-16 atomic % (at %) of rare-earth elements (R) including yttrium (Y), and 10.8-15 at % of boron (B), and is subjected to a hydrogen treatment method as HDDR process or d-HDDR process. Using the magnet powder obtained from carrying out d-HDDR processing, etc. on this magnet alloy, pellets with superior insertion characteristics into bonded magnet molding dies can be obtained, and bonded magnets with superior magnetic properties and showing low cost can be obtained.