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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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AmEx is offering $350 to open a high rate saving account with $25000 which has currently 3.3% APY. As the interest rate will likely to go slightly higher or stay at around the current level in the 12 months, that would be a much better deal which gives similar return in 12 months and is more flexibility. You can take the money out as soon as in 3 months and pocket the $350 plus interest.
AmEx is offering $350 to open a high rate saving account with $25000 which has currently 3.3% APY. As the interest rate will likely to go slightly higher or stay at around the current level in the 12 months, that would be a much better deal which gives similar return in 12 months and is more flexibility. You can take the money out as soon as in 3 months and pocket the $350 plus interest.
NOT for everyone? American Express High Yield Savings $350 Bonus (Targeted)
Only need to keep it there 60 days for the bonus, IF you can get it..
Since it's 5.0% deal expires on March 14th and many expect interest rates to continue to rise, no need to rush to buy this CD now. Might as will wait to see if there's a better offer that comes along over the next month and a half that's also FDIC insured.
Not comparing this to CD but if someone is interested in dividend, JEPI will pay 11.68% Yield. the price of the ETF is currently trading in the mid 50's. You could trade ETF like a stock. Always do your own DD.
That's a new ETF? Big gamble with no historical data.
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]
What is the advantage of buying treasuries from brokerage sites VS directly from the treasury at their treasurydirect website?
I'm not convinced that is a full 5% as being advertised after the 11 months... The link here has an earnings calculator - https://www.capitalone.com/bank/c...-cd-rates/
It's showing as 4.57% not 5%? Am I missing something?
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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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This was meant as a joke, no offense meant. Good advice nonetheless.
Believe it or not, 500k isn't an extreme amount of money & I see Xs at Walmart all the time.
App-o-Rama
Only need to keep it there 60 days for the bonus, IF you can get it..
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But if the rate start dropping savings rate also go down. Right. While CD will be guaranteed?
That's a new ETF? Big gamble with no historical data.
It buys stocks that pays dividends.
People search about why that isn't always the best idea.
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]
Does anyone have a promo code for this?
It's showing as 4.57% not 5%? Am I missing something?
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