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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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I saw others responded to you mainly about how to do it on the website, so I'll skip that. On the app, tap Give Rep underneath anyone's post that you find particularly helpful.
PayPal savings is 3.75 and should go up this week.
Capital one is 3.30 with increase coming this week.
Not sure it's really worth locking money in for 11 months for about 1.0 max
The recent auction of a 4-month t-bill for 4.6% makes the 11-month CD rate of 5% appear unappealing, as there is a high probability that interest rates will increase beyond 5%.
Look at 6month tbills. Ive been pumping em weekly. Current rate is 4.89 i think. Makes this cd weak especially no state tax.
Can someone explain the interest payout part to me? The two options are – "Keep interest in my CD" or "Payout my interest monthly or annually". If I choose the first, will the CD get compounded interest at maturity? (i.e. the interest earned in the first month will get added to the initial deposit and the combined amount will get 5% APY, same process repeats next month and so on?) OR no matter which option I choose, the maturity amount is now fixed? (5% APY of initial deposit only.)
In other words, if I "Keep interest in my CD", will I get higher amount at maturity?
I have the Capital One Quicksilver credtcard,but nothing else with Capital One. Can a Capital One CD account be tied to a checking account with a different bank to transfer funds? Thanks for being helpful and patient with a banking newby.
Yes. I only had 2 quicksilver cards with them, now I opened the CD account and it automatically linked my BofA account. I had it linked to my cards before, but yes the CD account does give you that option to link another bank checking account to do transfers.
I signed up for Robinhood gold which gives you 4 percent yield on the cash shitting there. If you put in a big enough amount the 5 dollar per
Month fee is neglible.
Until you get the itch to gamble on a 'free' trading platform and.. boom Shaka laka 💥
Thanks for replying.So, I could just transfer the whole amount to another bank after 11 months ,and then the CD atomatically closes?Are there fees to transfer the money out?
You can set up an ACH transfer with Capital One. Shouldn't be any fee associated with that. The account might or might not actually close, you'll have to use the Capital One system to close the account after moving your money.
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]
Anyone heard of New York Life? I've heard they have amazing Fixed Deferred Annuities and Income Annuities. Plus with the Fixed Deferred Annuities you get 10% of the entire annuity value as liquidity with no fees and compounding interest for 3-8 years
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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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https://www.treasurydir
I saw others responded to you mainly about how to do it on the website, so I'll skip that. On the app, tap Give Rep underneath anyone's post that you find particularly helpful.
Capital one is 3.30 with increase coming this week.
Not sure it's really worth locking money in for 11 months for about 1.0 max
Look at 6month tbills. Ive been pumping em weekly. Current rate is 4.89 i think. Makes this cd weak especially no state tax.
In other words, if I "Keep interest in my CD", will I get higher amount at maturity?
Yes. I only had 2 quicksilver cards with them, now I opened the CD account and it automatically linked my BofA account. I had it linked to my cards before, but yes the CD account does give you that option to link another bank checking account to do transfers.
Month fee is neglible.
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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]
Not true. 360 Performance Savings has 3.40% APY.
Link:
https://www.capitalone.
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