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So I started to ladder T-Bills for the reasons everyone is stating in this thread. The rate is so volatile (in a good way) that locking into anything even 12 months is too long for me and rates continue to climb. I use fidelity and my suggestion is this.
When they offer the new 4 week and 8 week and 13 week t-bill (they auction on diff days and diff weeks) go in and buy one of each of them with whatever money you can spare. Let's use 5k for each.
I would buy a 4 week t-bill with NO Rollover for 5k
I would buy an 8 week t-bill with NO Rollover for 5k
I would buy a 13 week t-bill WITH Rollover for 5k
Then after 4 weeks when that first on comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Then after 8 weeks when the second comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Now you will have 3 13 week t-bills rolling every 4 weeks or so and rolling into a new one with the proceeds. This way every 4 weeks you are capturing an increasing rate and not locked into anything longer than 13 weeks. You benefit from the rate hikes, can cash out at any time, and you have state tax shelter from the earned interest.
I can almost guarantee that the above will yield you more net income (taking in tax break) at the end of 11months then the 5% locked CD
just my 2cents
You can buy treasuries from just about any brokerage. I use Fidelity, as I like their platform and they don't charge fees/commissions for treasuries. Fidelity Fixed Income Page[fidelity.com]
Follow the above link and scroll down to the row "U.S. Treasury." Choose the duration you want and click on it. You can then click "buy" to start a trade of a specific treasury bill/bond. Fidelity's Intro to Treasuries[fidelity.com]
This is true, but it doesn't make an 11-month CD at 5% a bad idea. Those HYS can change their rates at any time, but here you're guaranteed to get 5%.
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What's the highest savings account APY from a reliable bank/credit union that does NOT require direct deposit? I'm seeing UFB Direct at 4.21% but I've never heard of them before.
UFB offers a great rate and then lowers it a bit later. Happened to me before so I swore never to use them
I thought Ally's 13-month CD @ 4.60% was a good deal when I opened it a few days back. This is a very good rate. Some other come close but those guys have lousy websites and apps for the most part.
I want to jump on this but the fed should be increasing the rate in the next 2 meetings. I assume CDs will be going a slight bit higher. Also waiting until April to see the new I bond rate if I'd rather purchase an I bond over a CD.
You clearly haven't been following along. They will continue quarter point hikes, or possibly no hikes at some point, but they aren't going to drop it for at least a year. Inflation could also likely rip back upwards, putting larger hikes on the table again.
Anyone know the max amount you can put into this 11 month 5% CD?
Initial Deposit Requirement: There is no minimum deposit required to open or maintain a Certificate of Deposit account. However, your Certificate of Deposit account may not exceed $1,000,000.
So the consequence of ending earlier is just you forfeit some of the interest you already "earned"? So for example, you put in $10,000, the penalties will never mean you lose any of the original $10,000, just the interest you earned? So basically no risk to your original investment?
You clearly haven't been following along. They will continue quarter point hikes, or possibly no hikes at some point, but they aren't going to drop it for at least a year. Inflation could also likely rip back upwards, putting larger hikes on the table again.
i didn't say anything about a drop. composite i bond rates have been trending down with latest fed hikes. there's no guarantee highest CD rates today will be higher next month, meanwhile where's the capital in the meantime?
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When they offer the new 4 week and 8 week and 13 week t-bill (they auction on diff days and diff weeks) go in and buy one of each of them with whatever money you can spare. Let's use 5k for each.
I would buy a 4 week t-bill with NO Rollover for 5k
I would buy an 8 week t-bill with NO Rollover for 5k
I would buy a 13 week t-bill WITH Rollover for 5k
Then after 4 weeks when that first on comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Then after 8 weeks when the second comes up, buy another 13 week t-bill with the 5k WITH Rollover.
Now you will have 3 13 week t-bills rolling every 4 weeks or so and rolling into a new one with the proceeds. This way every 4 weeks you are capturing an increasing rate and not locked into anything longer than 13 weeks. You benefit from the rate hikes, can cash out at any time, and you have state tax shelter from the earned interest.
I can almost guarantee that the above will yield you more net income (taking in tax break) at the end of 11months then the 5% locked CD
just my 2cents
Fidelity Fixed Income Page [fidelity.com]
Follow the above link and scroll down to the row "U.S. Treasury." Choose the duration you want and click on it. You can then click "buy" to start a trade of a specific treasury bill/bond.
Fidelity's Intro to Treasuries [fidelity.com]
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UFB offers a great rate and then lowers it a bit later. Happened to me before so I swore never to use them
https://www.navyfederal.org/check...rates.html [navyfederal.org]
Not seeing one
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https://www.capitalone.
You clearly haven't been following along. They will continue quarter point hikes, or possibly no hikes at some point, but they aren't going to drop it for at least a year. Inflation could also likely rip back upwards, putting larger hikes on the table again.
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