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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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Does anyone know how long Capital One holds your money before they add the funds to the cd ? They took the money via ach, out of my non capital one account on Friday and doesn't show available yet.
I bought a 1 year treasury bill yielding 5.01% this morning. Given the greater liquidity of treasuries compared with this CD (you'll forfeit all interest if you pull your money out early), I don't think there's a good reason for someone to pick this CD over treasuries. While this wasn't a bad deal when it was first posted, it's no longer compelling now as rates have continued to march upward.
I bought a 1 year treasury bill yielding 5.01% this morning. Given the greater liquidity of treasuries compared with this CD (you'll forfeit all interest if you pull your money out early), I don't think there's a good reason for someone to pick this CD over treasuries. While this wasn't a bad deal when it was first posted, it's no longer compelling now as rates have continued to march upward.
I bought a 1 year treasury bill yielding 5.01% this morning. Given the greater liquidity of treasuries compared with this CD (you'll forfeit all interest if you pull your money out early), I don't think there's a good reason for someone to pick this CD over treasuries. While this wasn't a bad deal when it was first posted, it's no longer compelling now as rates have continued to march upward.
where did you buy this and is it still available? i do not see it on fidelity.
where did you buy this and is it still available? i do not see it on fidelity.
I am not sure where he is buying a 1-year T-Bill today unless it is on the seconday market.
The next auction for a 52-week T-Bill is not until February 21.
The last auction for a 52-week T-Bill was January 25.
I am not sure where he is buying a 1-year T-Bill today unless it is on the seconday market.
The next auction for a 52-week T-Bill is not until February 21.
The last auction for a 52-week T-Bill was January 25.
I'm not the guy who bought that T-Bill, but I'm the guy who posted a screenshot of the 5.01% rate in post #543.
You can buy as little as $1000 and as much as $1T. There's no limit on how many treasury bonds you can buy. Note that these aren't Series I bonds that you heard about last year.
I use Treasurydirect for T bills. If I use another broker like fidelity, are their rates better than going directly with the treasury?
The Treasurydirect website is terrible. I use Fidelity, you can buy T-bills at auction or do what I do and buy on the secondary market. Fidelity doesn't charge fees for treasuries.
Yes, it would be secondary markets. Today it's showing 5.02% for a 12- month TB.
Using the one that matures on 02/15/2024 (CUSIP 912833LQ1) as an example, it says that
the Ask Yield to Maturity is 4.872%.
Where is Fidelity getting 5.02% ?
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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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The next auction for a 52-week T-Bill is not until February 21.
The last auction for a 52-week T-Bill was January 25.
Sign up for a Slickdeals account to remove this ad.
The next auction for a 52-week T-Bill is not until February 21.
The last auction for a 52-week T-Bill was January 25.
When I click on the 5.01% and log in, I get taken to secondary market T-Bills.
When I click on the 5.01% and log in, I get taken to secondary market T-Bills.
the Ask Yield to Maturity is 4.872%.
Where is Fidelity getting 5.02% ?
It looks like rates have fallen slightly since this morning, but I still see the 1 year above 5%.
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