Why is this is better than an ETF treasury fund, CDs, and high-interest savings accounts?
Answer: Treasury Bills "interest" is state & local tax-free on the money earned. So if you're in a high-income tax state and city they're worth it.ETF fund aren't always 100% in treasuries and charge fees.
Question (asked a dozen or more times in the thread) : How does bill interest work?
Answer: Treasury Bills "interest" is the difference between face value and purchase price. You buy a $10k bill at less than $10k, upon maturity, it is worth $10k. The difference between purchase price and maturity value is your "interest."
Tax Equivalent Yield Calculator For Savings Bonds, Treasury Bills, and Tax-Exempt Money Market Funds
https://www.mymoneyblog
How Buy and Sell Treasury Bills
https://thefinancebuff.com/treasury-bills-cd-money-market.html
When are the auctions? When can I place an order?
4, 8, 13, 17, and 26 week bills are auctioned every week.
52 week bills are auctioned every four weeks.
You can see recent results and the planned schedule at: https://www.treasurydir
4 and 8 week bills are usually announced on Tuesday, auctioned on Thursday, and settle on Tuesday.
17 and week bills are usually announced on Tuesday, auctioned on Wednesday, and settle on Tuesday.
13 and 26 week bills are usually announced on Thursday, auctioned on Monday, and settle on Thursday.
52 week bills are usually announced every 4th Thursday, auctioned on Tuesday, and settle on Thursday.
At a brokerage, you can usually can place an order between the announcement and auction.
At TreasuryDirect, you can place an order up to about 8 weeks in advance.
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Treasury BILLS are currently paying over 5% for various maturity lengths under 1 year. These can be bought through most brokerages even without a TreasuryDirect account.
Treasury BONDS are paying 4% or less and have 20 or 30 year terms.
The 4 week bill ordering opens tomorrow 8/8, the deadline to buy it is sometime Thursday 8/10 morning depending on where you are buying it and it settles on 8/15.
On TD Ameritrade, they take your money on the 10th (take it out of the money you can trade with when you hit purchase which can be as early as the 8th) and buy the bill on the 15th during time which you earn no interest. Thus the reason that I stopped buying 4 and 8 week bills at auction. Secondary markets settle the next day so often a better deal. Treasury direct does not take the money from your bank account till the day it settles and Vanguard keeps it in the settlement fund earning interest till the day it settles as well. Not sure about the other brokerage houses. Also, not sure if you rollover the t-bills how the time between redemption and the next auction works as far as any interest you are losing as that is often a week of interest as well.
FYI, if you do the math, 4 weeks for $10,000 usually gets you about $40 in interest for letting them hold your money for 5 weeks.
The Monday auctions for 3 months and six months settle on Thursday so much less time to hold your money for nothing and less redemption downtime.
The money market funds often have repurchase agreements that are taxed at the state and local level but obviously more liquid. Am looking into the ETFs now.
Good luck to everyone!
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1. Select date of investment, time frame, and amount. Very intuitive.
2. Investment period can be as short as one month. Fidelity does not support one month investment.
3. Investment amount can be as small as $100. Fidelity requires $1000 minimum.
The issue with treasury direct is that 1. It's only treasuries so I can't sell and buy an index fund in the same day, for example, and 2. On td you have to hold until maturity.
If I need to sell a t bill tomorrow on fidelity but it doesn't mature until Sept I can do that. On treasury direct I cannot. I must hold until maturity.
Same here. Flawless site, clunky but not complicated. I buy or roll an average of $15k each week in T Bills between 4 weeks and 6 months duration. Never a single problem in that time.
If you don't reinvest the principle the face value comes back like clockwork to the funding source (like a checking acct) of your choice by 630am on the maturity date. Very convenient if you want the cash back.
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Weekly auctions:
4, 8 week: Announced Tuesday, Auctioned Thursday, settles Tuesday.
17 week: Announced Tuesday, Auctioned Wednesday, settles Tuesday.
13, 26 week: Announced Thursday, Auctioned Monday, settles Thursday.
A 42-Day (6-Week) Cash Management bill is expected to be auctioned weekly at least through the end of the year. It is only available at brokerages. Announced Thursday, Auctioned Tuesday, settles Thursday.
There's also a 52 week bill every 4 weeks. Announced every fourth Thursday, Auctioned Tuesday, settles Thursday.
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TreasuryDirect : You can schedule purchases of regular weekly bills around eight weeks in advance, and buy in multiples of $100 face value. It can be difficult to sell before maturity since you'd need to transfer to a brokerage in multiples of $1000.
Brokerages: You usually have between one and three business days to put in the order between announcement and auction in multiples of $1000 face value. You may also be able to buy and sell on the secondary market, but the secondary market prices can vary between brokerages. There's been somewhat worse liquidity in the secondary market over the past several weeks at some brokerages.
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