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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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This is a great idea if you don't like the idea of parking too much in one institution anyway. Or too much within the same start/end date. That's also why the manual laddering of cds or tbills is so nice an idea.
Ally has a no penalty cd at 4.75%. I was thinking of parking my money here and if rates go up, pull the money out and roll it into something higher since there is no penalty
For those asking why t-bills are down it is because of the SV bank failure and people flocking to safety. Treasuries decreased across the curve. They will probably come back in the next week or two of auctions and I expect the 13 week to soon be over 5%. Took a little dip but to be expected based on the news.
I still see NO reason to be locking into an 11 -12 month CD when you are getting the same rate even on a depressed week through treasuries. Don't forget you also don't pay state tax on the interest on t-bills. So that 4.75% or 5% on the t-bill is worth more to you than a equiv CD and you aren't trying your money up for a year. I don't see any advantage to a CD, even a short term one, over a treasury with inflation and rate hikes still coming.
For those asking why t-bills are down it is because of the SV bank failure and people flocking to safety. Treasuries decreased across the curve. They will probably come back in the next week or two of auctions and I expect the 13 week to soon be over 5%. Took a little dip but to be expected based on the news.
I still see NO reason to be locking into an 11 -12 month CD when you are getting the same rate even on a depressed week through treasuries. Don't forget you also don't pay state tax on the interest on t-bills. So that 4.75% or 5% on the t-bill is worth more to you than a equiv CD and you aren't trying your money up for a year. I don't see any advantage to a CD, even a short term one, over a treasury with inflation and rate hikes still coming.
Thanks for this explanation!
Do you have suggestions if tbill ladder vs. IBonds are the better route? I'm getting ready to try one of them but can't figure out which is better.
From what I've read, it seems like its safer to wait until next month to make this decision?
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.
Sorry, I just saw this. No it can't. You can created a regular CapOne savings account, transfer some money into it from the other bank after tying them, then then from the savings account to the CD account.
i guess for me, it's my brokerage.
schwab doesnt seem to have tbills at auction, just secondary market?
found the tbill auctions at schwab.
my 1month tbill (secondary market) matured.
now buying:
Maturity: July 20, 2023 (3 months and 6 days from today)
Auction Date 04/17/2023
sooooo much more convenient than secondary market because Auto-rollover.
(no auto-rollover for secondary market buys so i have to login everyone to make a buy)
my 1month tbill (secondary market) matured.
now buying:
Maturity: July 20, 2023 (3 months and 6 days from today)
Auction Date 04/17/2023
sooooo much more convenient than secondary market because Auto-rollover.
(no auto-rollover for secondary market buys so i have to login everyone to make a buy)
my 1month tbill (secondary market) matured.
now buying:
Maturity: July 20, 2023 (3 months and 6 days from today)
Auction Date 04/17/2023
sooooo much more convenient than secondary market because Auto-rollover.
(no auto-rollover for secondary market buys so i have to login everyone to make a buy)
so turn off auto-roll and leave matured 13week t-bills as cash till the debt crisis is over?
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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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I still see NO reason to be locking into an 11 -12 month CD when you are getting the same rate even on a depressed week through treasuries. Don't forget you also don't pay state tax on the interest on t-bills. So that 4.75% or 5% on the t-bill is worth more to you than a equiv CD and you aren't trying your money up for a year. I don't see any advantage to a CD, even a short term one, over a treasury with inflation and rate hikes still coming.
I still see NO reason to be locking into an 11 -12 month CD when you are getting the same rate even on a depressed week through treasuries. Don't forget you also don't pay state tax on the interest on t-bills. So that 4.75% or 5% on the t-bill is worth more to you than a equiv CD and you aren't trying your money up for a year. I don't see any advantage to a CD, even a short term one, over a treasury with inflation and rate hikes still coming.
Do you have suggestions if tbill ladder vs. IBonds are the better route? I'm getting ready to try one of them but can't figure out which is better.
From what I've read, it seems like its safer to wait until next month to make this decision?
Sign up for a Slickdeals account to remove this ad.
schwab doesnt seem to have tbills at auction, just secondary market?
my 1month tbill (secondary market) matured.
now buying:
Maturity: July 20, 2023 (3 months and 6 days from today)
Auction Date 04/17/2023
sooooo much more convenient than secondary market because Auto-rollover.
(no auto-rollover for secondary market buys so i have to login everyone to make a buy)
my 1month tbill (secondary market) matured.
now buying:
Maturity: July 20, 2023 (3 months and 6 days from today)
Auction Date 04/17/2023
sooooo much more convenient than secondary market because Auto-rollover.
(no auto-rollover for secondary market buys so i have to login everyone to make a buy)
my 1month tbill (secondary market) matured.
now buying:
Maturity: July 20, 2023 (3 months and 6 days from today)
Auction Date 04/17/2023
sooooo much more convenient than secondary market because Auto-rollover.
(no auto-rollover for secondary market buys so i have to login everyone to make a buy)
Expires 3/15/23
https://www.capitalone.
best cd from your link is 12month 5%, as of 11/30/23.
Any more cap one cd specials rates?
their 360 Performance Savings is 4.3%.
For comparison (tax free state and local):
- gov't 13week t-bills (popular on this forum)
BANK DISCOUNT 5.31%
COUPON EQUIVALENT 5.47%
- gov't 6month t-bills (best rate?):
BANK DISCOUNT 5.3%
COUPON EQUIVALENT 5.54%
Though coupon equivalent meant 1 yr equivalent?
https://www.google.com/search?q=t...e&
but the 6month tbill pays .01% less than the 13week so have no idea why the coupon equivalent is higher?