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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782 Comments
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Care to elaborate ?
Not sure if i worded it right but meant to say that Fidelity in my opinion is the best brokerage option based on ease of use and other fee items I am seeing:
1) The Agency Bond GSE Bonds for example are not sold as new issue on Vanguard as they charge $1 per $1000 in bonds.
2)Transfer of funds and the availability of those funds before settlement is important and as such Fidelity lets me transfer and use $25,000 of that at the time of making the transfer while the settlement might be 1-2 days out. Vanguard has a wait (I forget if its 5 days and am not sure if this is because of margin or not).
3)Some of the IRA funds held in other Funds outside of Vanguard incurred not only Load Fees based on the IRA Fund prospectus but Vanguard also charge $20 per fund for transaction fees. Something that TD from where it was transferred did not and I could have sold it there and then moved it in cash per my my needs.
4)I provided a link for other brokerages such as Schwab that holds your funds when doing TBill autoroll vs Fidelity as they settle and purchase on the same day without holding your money etc.
Shahhere
Because your parents financials are not the same as anybody else's, you'll have to do your own research.
Thanks NYC, i get that "Journey" is going to be diff based on my/each circumstance. I was just looking for people who might have been down this road and know a thing or two to bounce off ideas to continue what I need
The link you provided is very helpful and I have most of that down but have to think about how to calculate the taxes when converting and when the pay them etc and few other specific details that I'd need to make sure is done right.
Shahhere
There's currently at least 5 weekly bill auctions.
If you figure it out, let us know.
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https://www.doctorofcre
https://www.doctorofcre
I believe that most people need to hold at least 15 months so you are not losing out on the 1 year interest part and only losing out on the last 3 months of low paying interest. Keep in mind that it doesn't matter if you sell on the 1st day or last so its better to sell on the front of the month and buy at the end for iBonds.
Shahhere
its worse than published 97.325611
https://www.treasurydirect.gov/in...0814_2.pdf [treasurydirect.gov]
can any expert there explain why is that? did Schwab eat the difference?
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