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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under news & research
fixed income, bonds & CDs
new issues
treasury
you should see "US treasury bill zero cpn" - thats a 6 week mature on 9/22/23 auction close on 8/8/23
and a 52 week matures on 8/8/24
I'm still new to t bill but i think other weekly options will become available when it's available on certain days of the week
I'm trying to compare to the FZDXX money market yielding 5.14%.
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That is not correct. The interest you earn on U.S. Treasury securities, including T-bills, is exempt from taxation only at the state and local level.
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Stop "clarifying" with bad information, it causes a lot of cumulative damage.
Anything greater then 1 year and less then 30 years is considered a NOTE. 30Y US security is the only true BOND in the Fixed Income nomenclature.
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oops, meant that for guy you were replying to, sorry
Stop "clarifying" with bad information, it causes a lot of cumulative damage.
1. For 4-Week bills, auctions are on Thursday (Let's say Day 1), I believe it's at 1PM New York Time. You MUST have your order in by then. Let's say you roll it 3 times ( 3x 4 weeks). $1,000. Let's say the coupon rate said $99.60. Money is not withdrawn yet. This is your auction date. If you try to get into an auction on Thursday night, you'll have to wait for the next Thursday afternoon.
2. The following Wednesday (Day 7), money will be withdrawn from your bank account. It will withdraw $996. This is your issue date.
3. ~3 weeks later (Day 29) on Thursday, a new auction will finalize. Let's say the coupon rate is $99.70. I'm pretty sure you will get this rate (no lapse)
4. Exactly 4 weeks after the issue date on Wednesday (Day 35), your bank account will receive $3 (it's $1000 - $996 = $4, but you need $997 to get $1k idk why they do it this way)
5. Every 4 weeks, you'll get the difference in your bank account and you'll get the immediate rate. Free money.
I don't like banks, so I hope everyone withdraws and invests it into t bills. I've done this maybe 10 times total. Good luck!
Do you think it is worth the hassle to remove it and buy T bills for 12 months?
How can I calculate how much I would save in taxes?
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