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.
Top Comments
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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912796ZD4 Bill 26-Week 05/30/2023 06/01/2023 11/30/2023 97.325611
You don't even know CUSIP can be reused. LOL, rookie mistake maybe?
edit: i guess dividends are paid quarterly vs the 5.5% being an annual yield
XOM was not making $, but it still increased the dividend. I started buying at 38 all the way down to 31.29 because I know that electric cars are scams. Sold some XOM earlier this year between 115-119.
Most people that trade the market are stupid. They buy high, and sell low. Even uncle Warren B sold OXY at fire sale prices and bought back at higher prices. I have no problem sitting on XOM (average 34 cost basis from 2020 purchases) with 9.94% yield. Previous two XOM purchases were made in 1994 and 2002.
You would still make good $ if you bought XOM at 55 when it triggered the 6% yield rule.
So a MMF 4.5% APY is a direct comparison to a Yield of 5.45%(or whatever) Treasury bill, regardless of if the MMF compounds daily or monthly, or if the treasury doesn't compound at all. The net money you'd earn after a year is 4.5% vs 5.45%. If the MMF compounds daily with an APY of 4.5%, its 'interest rate' will be lower, like 4.1% or so, to earn an APY of 4.45%
This is my understanding, at any rate. if you compare APYs, you don't need to know how they achieved that APY, it's apples to apples.
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Tax treatment is always on the underlying security. T-bills are still T-bills and taxed the same. Selling before maturity will change nothing.
I don't think you know how "yield" is calculated. JNJ's yield will never reach 6%... The average dividend for a "aristocrat" stock is 2.9%... Very few of these companies will ever reach 6% unless stock performance starts falling off a cliff.
SDY is underperforming the SPY YTD... You were better off in those T-bills than you were buying "dividend kings", what a joke.
https://i.imgur.com/SS3wrcE.png
https://finance.yahoo.c
I made good $ with dividend king/aristocrat ABBV and XOM. Both added in 2020. I can't calculate yield but I passed differential equation with multiple variables with an A+? How much education does it take to pass a broker license?
Most people in finance are crooks. And I'm done taking to one.
Ally bank CD says interest is paid out daily and compounded on CD, so wouldn't that be better than the treasury (am not sure if treasury bonds are compounded)?
comparison -> I have locked in no penalty 4.75% for 9 months vs 5.4% t-bill?
https://finance.yahoo.com/quote/S...c=fin-srch [yahoo.com]
I made good $ with dividend king/aristocrat ABBV and XOM. Both added in 2020. I can't calculate yield but I passed differential equation with multiple variables with an A+? How much education does it take to pass a broker license?
Most people in finance are crooks. And I'm done taking to one.
I don't have a brokers license. I'm buy side. Sell-side brokers work for me for new issue bonds. CFA Level III candidate though.
https://www.treasurydir
Thank you for your explanation and link to the accrued interest page. Reps!! Still not 100% sure what I'm supposed to do during tax time with this, but at least it explains why I got it. Too bad TD Ameritrade didn't know to tell me this. Even tho TD Ameritrade got bought by Schwab, Schwab is still (currently) keeping TD Ameritrade branding and operations separate. At least all my TD Ameritrade dealings still look unchanged.
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