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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How can a person like me see that the auctions for 13 weeks are on Monday ? Maybe I missed it.
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I've used Schwab and hate it holds funds for too long, for any transfer in and at 0.45% rate only, and upon maturity also the settlement time for another 1-3 days to milk you for no reason, while Fidelity sweep rate is above 4%
the TD isn't a bank so, it doesn't provide required for me Checking account option.
but, TD doesn't hold your money for any time at all, it pulls your funds from your bank at the settlement date only, as well as transfers it back at maturity date, also the same day to buy another TBill works via Zero Percentage C account, or reinvest on the same day
how it's on Fidelity side?
how long is the settlement time for incoming transfer to buy TBill?
how long is the settlement upon TBill maturity?
Can you buy another TBill on the same day as maturity day? as example matured 8 weeks TBill and to buy new 4 weeks TBill as the settlement date is the same for those.
When funds are required? upon announcement date or auction date or settlement date?
it's not simple to pre set TBill buy order for TD as it has to be before the announcement date, or about 5-7 days ahead. Sure your funds will be needed on settlement date only, but the order in so much time ahead.
Can at Fidelity you pre select which TBill to buy for a month ahead as at TD?
I can't do it at Schwab, that shows and allow only current auction week ...
tnx
I hold my savings money in CIT Platinum Savings, which earns 5.05% today. I have it linked to my Treasury Direct account, so it pulls and pushes money to this Savings account. Treasury Direct is very quick to pay and reliable when they pull money out (the issue day is the day they will take the money, usually at the end of the day, and the day the bill/note matures is the day it's sent/received at my savings acct). At least this has been my experience. And for me, CIT bank is the fastest at ACH of all the many savings accts I've tried. Within 1-2 days the money sent ACH from CIT will be at it's destination.
I've used Schwab and hate it holds funds for too long, for any transfer in and at 0.45% rate only, and upon maturity also the settlement time for another 1-3 days to milk you for no reason, while Fidelity sweep rate is above 4%
the TD isn't a bank so, it doesn't provide required for me Checking account option.
but, TD doesn't hold your money for any time at all, it pulls your funds from your bank at the settlement date only, as well as transfers it back at maturity date, also the same day to buy another TBill works via Zero Percentage C account, or reinvest on the same day
how it's on Fidelity side?
how long is the settlement time for incoming transfer to buy TBill?
how long is the settlement upon TBill maturity?
Can you buy another TBill on the same day as maturity day? as example matured 8 weeks TBill and to buy new 4 weeks TBill as the settlement date is the same for those.
When funds are required? upon announcement date or auction date or settlement date?
it's not simple to pre set TBill buy order for TD as it has to be before the announcement date, or about 5-7 days ahead. Sure your funds will be needed on settlement date only, but the order in so much time ahead.
Can at Fidelity you pre select which TBill to buy for a month ahead as at TD?
I can't do it at Schwab, that shows and allow only current auction week ...
tnx
Schwab is even worse. Best way is to use Treasury direct and automatic rollover no loss of interest days.
https://www.youtube.com/watch?v=W...p=2
How can a person like me see that the auctions for 13 weeks are on Monday ? Maybe I missed it.
For buying in brokerage accounts I use Merrill Edge, Fidelity and TD Ameritrade. The Merrill Edge fixed income screener is very good. I've noticed recently that the minimum purchase amount is $10,000 for most (if not all) T-bills on Merrill Edge and Fidelity. Used to be able to buy T-Bills with a $1000 minimum. I avoid TD Ameritrade because they markup T-bill prices so the yield is lower.
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