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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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Yes, she promotes membership in her 'Supersavers club' but she's knowledgeable, to the point and the information is aimed at novices. There are certain advantages to not using Treasury Direct.
Highly recommend: https://youtu.be/rFuiC-UNeMc [youtube.com]
Much of the information presented here existed over at https://bogleheads.org/forum/viewforum.php?f=1 [bogleheads.org] and in much greater detail. There are threads dating back several years about CMBs.
That's the safety comparison I didn't want to get into
I hope this whole thread will get at least some folks to be familiar with treasury.
Fidelity only had my HSA and 401k so i had to add my checking account and that won't become active for a few days.
hopefully the rates will still be this good next week?
My friend has an etrade account and they sell treasury. Only downside is minimum $5000, not the $1000 like some other brokers.
Not much mentioned in this thread are federal money market funds. They are highly liquid and almost always can be bought or sold for $1. Currently, Vanguards Treasury Money Market Fund, VUSXX, shows a 5.03% yield. A month or so ago I was able to sell and move the proceeds from VUSXX to my checking account in 2 days.
Indeed federal money funds are great. Just looked up the fund you mentioned. Fee is low 0.09%. 9 base points are not bad to save the hassle buying every week. Especially in an IRA account where tax advantages of treasury are gone.
Any guidance on the liquidity of CMB or T bills and how much time does it take to get the money back to checking account for regular use
E-Trade showed a minimum of 1000 on this one
Edit: I see the problem. If I transfer money today it won't be settled before the auction.
For you with the linked bank account, it is 3 business days -- I think -- for the funds to be available once transferred.
For someone who doesn't even have a Fidelity account, it is about twice as long. Not sure if Fidelity uses Plaid or not, but 3 business days if they do the two small micro deposits and then 3 business days for the funds to settle.
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That's good news. $5000 min is just ridiculous. They just try to block small accounts get in treasury.
The yields on these federal money market funds can change and do change daily.
The advantages of federal money market funds are liquidity and very safe but the rates of return change often. The advantage of a T-bill is that you lock in the rate of return, similar to a CD and are very safe.
Not much mentioned in this thread are federal money market funds. They are highly liquid and almost always can be bought or sold for $1. Currently, Vanguards Treasury Money Market Fund, VUSXX, shows a 5.03% yield. A month or so ago I was able to sell and move the proceeds from VUSXX to my checking account in 2 days.
I had started by trying to pull the money in from E*Trade but found that I need to wait several days for the verification deposits and then 3 days for the transfer.
By adding this new Morgan Stanley savings account as an external account in my Chase account, I was able to push the funds instantly.
Posting is case this might help someone.
Go to trading
go to bonds and CDs
The first thuing you see is US treasuries.
I went to the bonds and CD's and entered the CUSIP 912797FJ1 into the search box and it came right up. I then selected 'buy' and then on the next page under quantity I run into issues. The quantity box has ,000 after it. Leading me to believe if I put in 1, then that is 1000. But any number I put in here under 1000 throws an error that the minimum is 1000. But if I put 1000 into this box it throws an error that I have insufficient funds. Although is says right on the same screen that I have "Pre-Trade Purchasing Power: $2000.00"
Also, I must select either a price box or a Yield box. Both have pre populated amounts. No matter which I select, I get the same errors as listed above.
Any suggestions?
I went to the bonds and CD's and entered the CUSIP 912797FJ1 into the search box and it came right up. I then selected 'buy' and then on the next page under quantity I run into issues. The quantity box has ,000 after it. Leading me to believe if I put in 1, then that is 1000. But any number I put in here under 1000 throws an error that the minimum is 1000. But if I put 1000 into this box it throws an error that I have insufficient funds. Although is says right on the same screen that I have "Pre-Trade Purchasing Power: $2000.00"
Also, I must select either a price box or a Yield box. Both have pre populated amounts. No matter which I select, I get the same errors as listed above.
Any suggestions?
I went to the bonds and CD's and entered the CUSIP 912797FJ1 into the search box and it came right up. I then selected 'buy' and then on the next page under quantity I run into issues. The quantity box has ,000 after it. Leading me to believe if I put in 1, then that is 1000. But any number I put in here under 1000 throws an error that the minimum is 1000. But if I put 1000 into this box it throws an error that I have insufficient funds. Although is says right on the same screen that I have "Pre-Trade Purchasing Power: $2000.00"
Also, I must select either a price box or a Yield box. Both have pre populated amounts. No matter which I select, I get the same errors as listed above.
Any suggestions?
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I went to the bonds and CD's and entered the CUSIP 912797FJ1 into the search box and it came right up. I then selected 'buy' and then on the next page under quantity I run into issues. The quantity box has ,000 after it. Leading me to believe if I put in 1, then that is 1000. But any number I put in here under 1000 throws an error that the minimum is 1000. But if I put 1000 into this box it throws an error that I have insufficient funds. Although is says right on the same screen that I have "Pre-Trade Purchasing Power: $2000.00"
Also, I must select either a price box or a Yield box. Both have pre populated amounts. No matter which I select, I get the same errors as listed above.
Any suggestions?