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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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Hello...which is a good online brokerage account to buy T-Bills and also for general investing purposes such as Stock/ETF trading? There are so many choices like Fidelity, Merrill, ETrade, JP Morgan etc. that don't have any commissions or fees for online trading. How do we choose?
Hello...which is a good online brokerage account to buy T-Bills and also for general investing purposes such as Stock/ETF trading? There are so many choices like Fidelity, Merrill, ETrade, JP Morgan etc. that don't have any commissions or fees for online trading. How do we choose?
Many people's employers use Fidelity for 401k.
If yours does, use Fidelity.
To each his own. I lived in Mississippi for several years and between the state taxes, tax on food, drugs, and medical services, and the OUTRAGEOUS cost of car tags.... yeah, no, thanks. I'll take Florida.
Thanks again to the OP of this deal. I have now purchased four of these CD's.
Ally is 5% for 18 months.
Also fyi for those touting ibonds. The next projected rate is like 2.5% or something like that. 6.9% (whatever we're at) + 2.5% divided by 2 = approx 4.7% interest for 1 year.
ibonds are still ok, but not sure bet it used to be a year ago.
Perfect. I already have a Capital One account and was able to transfer some money from that account into the new 11 Month CD account with only a couple of clicks. Thanks.
5% on checking equivalent too at https://juno.finance.
5% bonds that are redeemable any time at Worthy Bonds.
20-30% farming on stablecoins if you look around a bit and are willing to take different risks.
Opportunities are out there. Locking yourself in at a rate below inflation in a time when "but inflation is increasing less" is considered an optimistic statement is not an opportunity.
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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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If yours does, use Fidelity.
If yours does, use Fidelity.
https://www.youtube.com/watch?v=eq68aL3
Her channel is filled up with lots of info, including how to buy with screenshots for each of the top 4 brokerages.
HTH
https://www.youtube.com/watch?v=eq68aL3
Her channel is filled up with lots of info, including how to buy with screenshots for each of the top 4 brokerages.
HTH
Thank you for the link.
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Or just move to Florida. lol
Thanks again to the OP of this deal. I have now purchased four of these CD's.
Also fyi for those touting ibonds. The next projected rate is like 2.5% or something like that. 6.9% (whatever we're at) + 2.5% divided by 2 = approx 4.7% interest for 1 year.
ibonds are still ok, but not sure bet it used to be a year ago.
https://slickdeals.net/f/16414867-primis-bank-open-a-savings-account-get-5-03-apy-1-minimum-deposit?attrsrc
5% bonds that are redeemable any time at Worthy Bonds.
20-30% farming on stablecoins if you look around a bit and are willing to take different risks.
Opportunities are out there. Locking yourself in at a rate below inflation in a time when "but inflation is increasing less" is considered an optimistic statement is not an opportunity.
Sign up for a Slickdeals account to remove this ad.