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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)
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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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See below for a selection of today's rates
Current CD rates available through Schwab CD OneSource
Maturity Ranges Rates up to
1-3 Month CDs 3.44% APY
4-6 Month CDs 3.94% APY
7-9 Month CDs 4.02% APY
10-18 Month CDs 4.10% APY
Are these brokered CDs?
If you cash them out before 5 years, you lose 3 months of interest.
https://www.forbes.com/advisor/in...e-i-bonds/
401k is a LONG teem vessel..its not timing the market its your time in the market, historically the market has always bounced back. just buy more now while the market is ON SALE...remember buy low sell high?
Market timing.......
historically, market is the only place to beat inflation.
https://www.schwab.com/fixed-inco...es-deposit
Schwab offers brokered CDs...
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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I routinely buy 28 day bills at both brokerages (they typically auction every Thursday) and use that as a better alternative to their purchased/sweep money market funds. But this also means that aside from selling a security I only get access to my funds once every 7 days when one set of bills mature. The purchased money market funds would allow daily access.
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.
Learned new thing everyday. Thanks
CDs interest are taxable..
T-Bills work a lot like a CD, but pay a slightly higher or much higher interest rate than a CD, and the interest is only taxed at the Federal level, important if your state has taxes on interest (or capital gains).
Can be bought directly from the US Treasury but better to buy through a brokerage, like E-Trade or similar because you have much greater flexibility. Buying from the US Treasury works like an e-Bay auction - "this bond will be sold on this date. You have to wait until then". (You actually are bidding against others, but the market is so huge and predictable you know well in advance pretty much what the price will be). Brokerage works like a 2nd hand store - "anything you see on the shelf is for sale right now. We are also buying anything you want to sell"
If you hold the T-Bill to maturity, you know for certain on the day you buy it - like a CD - what you will get at the maturity date. Unlike a CD, you can sell them (via a brokerage) at any time prior to the maturity date, without administrative penalty (but the market price may have moved up or down).
If you sell them (via brokerage acct) prior to maturity you may get more or less than you paid, if short-term interest rates (what the Federal Reserve controls) have gone down or up respectively.
There are also T-Notes and T-Bonds that work very much the same, but have longer maturities. They also pay interest twice per year, unlike a T-Bill which derives it's return 100% from the difference between purchase price and face value.
Selecting maturity, when you expect interest rates to go up or down over time, is a complicated reasoning process. For that reason, favoring short term maturities when interest rates may well rise (like now?), is the better plan. No matter what happens you know at purchase - like a CD - that if you hold until maturity, you will get back what you expect. You can then re-invest at the higher rate. If you buy longer maturity and interest rates move up, you mostly lose the chance to get that higher level of rates for the money you invested earlier, for the entire time until the maturity date of your original purchase. Selling and re-buying a higher rate Bill does not fix that, since you lose some original principal when you sell at market rate prior to maturity after rates have moved like that. If interest rates continue to go up, you can somewhat fix your mistake but not completely. Buying long maturity when interest rates are rising is a bad financial move. On the other hand, when rates are falling, it's the tits.
Click on Trade --> Fix Income -> Select Treasury and according to your preferred maturity date ie Oct-2023 (if you want to invest for one year) -> Hit Search.
If you see "coupon" as Zero that means it is getting sold for discount. So if you , in Trade quantity, select 1 and click on get Price. It might show you around $978 . So if you invest $978 (with coupon rate as Zero) now , you will get $1000 on maturity ie Oct 2023.
As others mentioned , No state tax.
401k is a LONG teem vessel..its not timing the market its your time in the market, historically the market has always bounced back. just buy more now while the market is ON SALE...remember buy low sell high?
very hard to time the market...what if the market went the other way, like it usually does...you missed out on 10-15% gains...cant time the market, its time in the market!
historically, market is the only place to beat inflation.
For those close to retirement or can't bear risk- treasuries are about the best anyone can do in the short-term. Even bonds are getting whacked.
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