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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The only reason I can see to use TD is if you have some massive amount to invest and the small rate boost/tax advantage means serious $$.
Do you think it is worth the hassle to remove it and buy T bills for 12 months?
How can I calculate how much I would save in taxes?
Im keeping my money I got in my Ally 4.75 No-Penalty CD until it matures and will likley renew as its easy as all heck...but I also had a chunk of change in their regular savings (4.25% APR) that I am going to test out these T-Bills with, although through Fidelity vs Treasury Direct.
The only reason I can see to use TD is if you have some massive amount to invest and the small rate boost/tax advantage means serious $$.
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?
https://www.treasurydir
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It seems SGOV you have to make sure to hold to the ex-dividend date each month (i.e. selling it one day short means you miss out on 1 month's interest), while with a US Treasury Money Market fund you can sell it any time and get the interest up until the day you sell.
Also, do you get the same tax treatment (no state income tax) with an ETF like SGOV?
You're probably looking at past results, which will of course be lower because interest rates were lower.
I'm trying to compare to the FZDXX money market yielding 5.14%.
You can look up SEC's price history to see for yourself. The impact of Fed rate increases on the NAV is basically nil. The price variations are almost all from interest (which is only paid out monthly, so the price increases slowly every month until the interest is paid).
https://www.macrotrends
they doubled their money every 5 years for 30 years!! NO LIMIT and NO RISK!
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