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US Treasury CMB 161-day bill. Expected yield 5.27%, may go higher

514 193 May 25, 2023 at 02:49 PM in Finance (7)
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Last Edited by zjs2k May 31, 2023 at 02:27 AM
+64 Deal Score
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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.

=======

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.treasurydirect.gov/au.../upcoming/
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Joined Mar 2006
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ubthca11
05-25-2023 at 04:02 PM.
05-25-2023 at 04:02 PM.
Thanks OP. Vanguard doesn't allow individual treasuries, but does have a short term treasury fund, VFISX. Is this a proxy?
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steve771
05-25-2023 at 04:20 PM.
05-25-2023 at 04:20 PM.
OR you could just get a Treasury Direct account, skip dealing with a broker, and buy T bills at similar, if not better, rates. Recent 4 week auction was 5.75%, 8 week was 5.35, etc. Do a google for 'recent treasury direct auctions' to see all the T Bill recent results. Yes, this is just as variable as the OP refers to, but will most likely be in the ball park of the most recent auctions.
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JimB3957
05-25-2023 at 06:03 PM.
05-25-2023 at 06:03 PM.
Quote from ubthca11 :
Thanks OP. Vanguard doesn't allow individual treasuries, but does have a short term treasury fund, VFISX. Is this a proxy?

Vanguard does sell individual treasuries.
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Original Poster
zjs2k
05-25-2023 at 06:25 PM.
05-25-2023 at 06:25 PM.
Quote from steve771 :
OR you could just get a Treasury Direct account, skip dealing with a broker, and buy T bills at similar, if not better, rates. Recent 4 week auction was 5.75%, 8 week was 5.35, etc. Do a google for 'recent treasury direct auctions' to see all the T Bill recent results. Yes, this is just as variable as the OP refers to, but will most likely be in the ball park of the most recent auctions.
If you buy new issue, the yield is the same. CMB can only be bought at brokers. But you can get saving bond at Treasury Direct.

Another advantage of brokers is that you can sell your treasury in case you really need the money. If you buy at Treasury Direct and want to sell early, you still need to transfer to broker first.

So, get both Smilie
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Original Poster
zjs2k
05-25-2023 at 06:37 PM.
05-25-2023 at 06:37 PM.
Quote from ubthca11 :
Thanks OP. Vanguard doesn't allow individual treasuries, but does have a short term treasury fund, VFISX. Is this a proxy?
Fund is different. First, there is always fees. Second, you may need to pay state/city tax if in a taxable account and state. More importantly, you can actually lose money with fund like VFISX. There is no maturity date. For treasury, at least you are still guaranteed the yield if you wait until mature.
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Peerless_Warrior
05-25-2023 at 06:46 PM.
05-25-2023 at 06:46 PM.
So help me out. I have 16k in a savings account. 3.9% interest. Should I dump that money into this via fidelity? I don't forsee any major purchases in the next year.
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koolwadz
05-25-2023 at 07:17 PM.
05-25-2023 at 07:17 PM.
Quote from Peerless_Warrior :
So help me out. I have 16k in a savings account. 3.9% interest. Should I dump that money into this via fidelity? I don't forsee any major purchases in the next year.
Yes do it
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TheStig540
05-25-2023 at 07:41 PM.
05-25-2023 at 07:41 PM.
What is the difference between a TBill and CMB?
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nyc10036
05-25-2023 at 07:49 PM.
05-25-2023 at 07:49 PM.
Quote from Peerless_Warrior :
So help me out. I have 16k in a savings account. 3.9% interest. Should I dump that money into this via fidelity? I don't forsee any major purchases in the next year.
It's probably too late now to link your bank account up to Fidelity in time for the auction of May 30, 2023, especially given that Monday May 29 is a holiday.
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Corporate Thug
05-25-2023 at 07:53 PM.
05-25-2023 at 07:53 PM.
Quote from TheStig540 :
What is the difference between a TBill and CMB?
I think CMBs are issued a lot less frequently with shorter maturity periods when the gov needs quick money.
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buffers
05-25-2023 at 08:10 PM.
05-25-2023 at 08:10 PM.
Can this be bought using Fidelity IRA account?
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hysterias
05-25-2023 at 11:11 PM.

Our community has rated this post as helpful. If you agree, why not thank hysterias

05-25-2023 at 11:11 PM.
Quote from buffers :
Can this be bought using Fidelity IRA account?

Yes. Fixed income section. Cusip is 912797FJ1
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Peerless_Warrior
05-26-2023 at 12:55 AM.
05-26-2023 at 12:55 AM.
Quote from nyc10036 :
It's probably too late now to link your bank account up to Fidelity in time for the auction of May 30, 2023, especially given that Monday May 29 is a holiday.
I already have fidelity (individual brokerage, bloom and cash management). My bank account has been linked for 2yrs.
Quote from koolwadz :
Yes do it
Thank you.


Edit: I see the problem. If I transfer money today it won't be settled before the auction.
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Last edited by Peerless_Warrior May 26, 2023 at 01:14 AM.
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Gb1908
05-26-2023 at 01:17 AM.
05-26-2023 at 01:17 AM.
After default, rates likely to spike at least 1.5%
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