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One-Year Treasury Constant Maturity T bill 4.14
September 25, 2022 at
03:59 PM
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(4)
Deal Details
Last Edited by BeAuMaN | Staff September 25, 2022 at 09:22 PM
I don't know that much about this. Sharing here to get some feedback. It seems it is highr than CD
Treasury Bills
Treasury bills, or T-bills, are sold in terms ranging from a few days to 52 weeks. Bills are typically sold at a discount from the par amount (par amount is also called face value); rarely, they have sold at a price equal to the par amount.
When a bill matures, you are paid its par amount. If the par amount is greater than the purchase price, the difference is your interest.
You can buy bills from us in TreasuryDirect. You can also buy them through a bank or broker. (We no longer sell bills in Legacy Treasury Direct, which we are phasing out.)
You can hold a bill until it matures or sell it before it matures.
Learn more in "Treasury Bills in Depth"
Buy T-Bills in TreasuryDirect
Use Treasury bills to:
Diversify your investment portfolio
Participate in a secure, short-term investment
More about Treasury bills in the Research Center
at a glance
Original Issue Rate: The discount rate determined at auction.
See rates in recent auctions
Minimum Purchase: $100
Maximum Purchase
(in a single auction): Noncompetitive - $10 million
Competitive - 35% of offering amount
(See types of bidding in "Auctions in Depth")
Investment Increment: Multiples of $100
Issue Method: Electronic
Rates & Terms
Treasury bills are issued for terms of 4, 8, 13, 26, and 52 weeks. Another type of Treasury bill, the cash management bill, is issued in variable terms.
4-week, 8-week, 13-week, 26-week, and 52-week bills are auctioned on a regular schedule.
Cash management bills aren't auctioned on a regular schedule.
More about Treasury Bills rates and terms in the Research Center
Redemption Information
Minimum Term of Ownership: In TreasuryDirect, 45 days
Interest-Earning Period: To maturity
More about Treasury Bills redemption in the Research Center
Tax Considerations
Interest income is exempt from state and local income taxes.
Interest income is subject to federal income tax.
More about Treasury Bills tax considerations in the Research Center
https://www.treasurydir
https://home.treasury.g
Treasury Bills
Treasury bills, or T-bills, are sold in terms ranging from a few days to 52 weeks. Bills are typically sold at a discount from the par amount (par amount is also called face value); rarely, they have sold at a price equal to the par amount.
When a bill matures, you are paid its par amount. If the par amount is greater than the purchase price, the difference is your interest.
You can buy bills from us in TreasuryDirect. You can also buy them through a bank or broker. (We no longer sell bills in Legacy Treasury Direct, which we are phasing out.)
You can hold a bill until it matures or sell it before it matures.
Learn more in "Treasury Bills in Depth"
Buy T-Bills in TreasuryDirect
Use Treasury bills to:
Diversify your investment portfolio
Participate in a secure, short-term investment
More about Treasury bills in the Research Center
at a glance
Original Issue Rate: The discount rate determined at auction.
See rates in recent auctions
Minimum Purchase: $100
Maximum Purchase
(in a single auction): Noncompetitive - $10 million
Competitive - 35% of offering amount
(See types of bidding in "Auctions in Depth")
Investment Increment: Multiples of $100
Issue Method: Electronic
Rates & Terms
Treasury bills are issued for terms of 4, 8, 13, 26, and 52 weeks. Another type of Treasury bill, the cash management bill, is issued in variable terms.
4-week, 8-week, 13-week, 26-week, and 52-week bills are auctioned on a regular schedule.
Cash management bills aren't auctioned on a regular schedule.
More about Treasury Bills rates and terms in the Research Center
Redemption Information
Minimum Term of Ownership: In TreasuryDirect, 45 days
Interest-Earning Period: To maturity
More about Treasury Bills redemption in the Research Center
Tax Considerations
Interest income is exempt from state and local income taxes.
Interest income is subject to federal income tax.
More about Treasury Bills tax considerations in the Research Center
https://www.treasurydir
https://home.treasury.g
112 Comments
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There is also a way to put in more than 10k by using tax return to purchase, you can fill out a form (bureaucracy, yuck) to "overpay" your taxes and us it to buy an additional 5k iirc.
As of this writing, treasuries maturing about 6 months and beyond are yielding in the 4% range. And interest is free from state/local taxes.
There is no good reason to purchase bonds thru the treasurydirect website. And there is a major disadvantage. You can purchase all treasuries thru brokerage firms such as Schwab and Fidelity. There are no fees whatsoever to purchase treasuries thru them. And you can purchase treasuries in the secondary market (those that were previously sold in an auction) as well as brokered bank CD's which have finally caught up to treasury rates @ intermediate maturities. And by holding your positions at the brokerage firm you retain the ability to sell them at any point whereas positions purchased in a treasurydirect account can only be held to maturity or transferred to a brokerage firm.
Market timing.......
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Examples abound in the municipal market right now. Since interest rates were so low for so long, almost all currently outstanding municipal bonds have coupons in the 3.00-3.50% range. But with longer term rates much higher right now (in the mid/upper 4's for longer term/highest quality issuers) these bonds are selling at big discounts, many times in the 75-80 range, meaning you would pay $8000 for a $10,000 bond. You would receive the coupon payments until maturity/sale date and if held to maturity you would receive the face value which in this example results in what conventional wisdom would be treated as a capital gain. Unfortunately the previously mentioned de minimus rule applies and that gain would be considered ordinary income. But that rule wouldn't apply to corporates/treasuries, but OID rules might depending on circumstances.
As of this writing, treasuries maturing about 6 months and beyond are yielding in the 4% range. And interest is free from state/local taxes.
There is no good reason to purchase bonds thru the treasurydirect website. And there is a major disadvantage. You can purchase all treasuries thru brokerage firms such as Schwab and Fidelity. There are no fees whatsoever to purchase treasuries thru them. And you can purchase treasuries in the secondary market (those that were previously sold in an auction) as well as brokered bank CD's which have finally caught up to treasury rates @ intermediate maturities. And by holding your positions at the brokerage firm you retain the ability to sell them at any point whereas positions purchased in a treasurydirect account can only be held to maturity or transferred to a brokerage firm.
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