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US Treasury CMB 161-day bill. Expected yield 5.27%, may go higher
May 25, 2023 at
02:49 PM
in
Finance
(7)
Deal Details
Last Edited by zjs2k May 31, 2023 at 02:27 AM
NOTE:
The yields listed here are annualized (APY).
The CUSIP for this CMB is 912797FJ1.
Current expected yield according to Fidelity is 5.3% (May 26), 5.268% (May 27).
Final edit: the result was out (May 30): 5.562% (investment rate, equivalent to APY).
This thread was moved out of the "Hot Deals" forum (understandably. I don't think Treasury will give SD a cut for promoting their T-Bills Haha!). Despite received much less attention than the other Treasury threads, I hope everyone read this got some useful information (like the difference between CMB and T-bills, or there are bills called CMB). I can't vouch for anyone else's comments here, but I tried to be clear about things that I know, I assume, I guess or I don't know in my comments.
Final recommendation: continue to purchase the Bills of all durations as long as they remain high yields. At 5+% yield with essentially 0 risk, it makes the risky investment in stocks / bitcoin or similar becomes less and less attractive.
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Since Treasury's CMB doesn't have a fixed schedule, which leads to less competitive bids, which in turn **usually"" leads to higher yield. This 161-day bill announced today has an expected yield of 5.27% according to Fidelity. But it **could** be higher. Example: last week's 21-day bill estimated yield ~ 5.5% (can't remember exactly). The final yield was 6.3+%.
Note: you can only buy it through brokers. Fidelity allows multiples of $1000 ("1 bond"). ETrade is multiples of $5000.
Seepost #163771055 for additional info on ETrade (Thanks to Jayman007)
The auction day is May 30. Be sure to place the order before then. (Before 12 AM for non-competitive CMB. Brokers may stop take orders before then. So place order early.)
https://www.treasurydir
The yields listed here are annualized (APY).
The CUSIP for this CMB is 912797FJ1.
Current expected yield according to Fidelity is 5.3% (May 26), 5.268% (May 27).
Final edit: the result was out (May 30): 5.562% (investment rate, equivalent to APY).
This thread was moved out of the "Hot Deals" forum (understandably. I don't think Treasury will give SD a cut for promoting their T-Bills Haha!). Despite received much less attention than the other Treasury threads, I hope everyone read this got some useful information (like the difference between CMB and T-bills, or there are bills called CMB). I can't vouch for anyone else's comments here, but I tried to be clear about things that I know, I assume, I guess or I don't know in my comments.
Final recommendation: continue to purchase the Bills of all durations as long as they remain high yields. At 5+% yield with essentially 0 risk, it makes the risky investment in stocks / bitcoin or similar becomes less and less attractive.
=======
Since Treasury's CMB doesn't have a fixed schedule, which leads to less competitive bids, which in turn **usually"" leads to higher yield. This 161-day bill announced today has an expected yield of 5.27% according to Fidelity. But it **could** be higher. Example: last week's 21-day bill estimated yield ~ 5.5% (can't remember exactly). The final yield was 6.3+%.
Note: you can only buy it through brokers. Fidelity allows multiples of $1000 ("1 bond"). ETrade is multiples of $5000.
Seepost #163771055 for additional info on ETrade (Thanks to Jayman007)
The auction day is May 30. Be sure to place the order before then. (Before 12 AM for non-competitive CMB. Brokers may stop take orders before then. So place order early.)
https://www.treasurydir
220 Comments
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Good prediction. That why we shouldn't dump all our money to this one bill. Instead, buy a little every week. You can check the live market yield for different treasury online. Here is one:
https://tradingeconomic
Asking if this idea goes viral and a ton of money pours into the next auction, will everyone's yield be significantly worse than what we could be doing in other short term instruments.
It can be harder than meme stocks
We mortals usually buy non-competitive bid and we get the high yield and our money is too small and won't affect the yield. To put in perspective (roughly the real numbers), a bill wants to get 100 billion, there will be 200 billion competitive bids and about 1 billion non-conpetitive, which will always be filled. So about 99 billion competitive bids won't be accepted.
certainly, there is a learning curve to start buying these bond
I never managed to even create an usdirect account... as they asked for some information that I cannot offer easily.
If you can get a broker account, you are good to go. Actually you can only get CMB at brokers.
Tell me I'm wrong someone so I can hold my nose and buy.
Edit - I just checked Vanguard and they have a 3 month Treasury at 6.785% on 300K minimum.
100,000
United States Treas Bills
06/06/2023
0.000 99.870
99.882 6.785%
Tell me I'm wrong someone so I can hold my nose and buy.
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1. Could the actual yield be lower than expected yield?
2. Are the tax implications the same whether you buy it on Fidelity or through TreasuryDirect?
Thank you
Tell me I'm wrong someone so I can hold my nose and buy.
Edit - I just checked Vanguard and they have a 3 month Treasury at 6.785% on 300K minimum.
100,000
United States Treas Bills
06/06/2023
0.000 99.870
99.882 6.785%
If you want to just put your $$ in "short term" you can select to "reinvest".
So one can put $XXX into 4 week T-bills and have it reinvest a number of times.
This gives some flexibility, you can cancel at any time and the only penalty is that your $$ will be tied up for the remaining time of the 4 week auction.
Worst ever website to deal with. Last year, I accidently mistyped my password and I got lockout. I tried calling their phone number, more than 13 times, and I got tapped recording. I emailed their website, and the message said something like "No response".
Research > Fixed Income > Individual Bonds
Search by CUSIP 912797FJ1 which someone posted in the thread earlier.
Category in Fidelity is under
"Fixed income, bonds, and CDs"
Wire the money. It will be there today before trading is closed.
My Vanguard Federal Money Market account holds my cash, and it yields about 5% now. The bond yield mentioned in this thread is 5.27%. The difference doesn't seem big. Is it worthwhile to shift the cash from MM to this bond?
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Personally I don't think so. If the debt ceiling takes a little longer you might have to wait to get your June 6 payment and you might not get anything extra.
Lastly keep in mind that's not 6% in a week, you're getting 6%/52