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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the TFLO has just YTD Daily Total Return 4.27% , buy once and collect dividends, also 0.15 Expense Ratio. close to 0 work for you. you can sale ETF at any time
TBills 1-6 month at around 5.5%, but you have to buy, reinvest, wait till maturity by yourself. you have to monitor to let it reinvest or buy another term. unless you just buy and set it to reinvest till canceled then no work and higher rate vs TFLO. you can't sell if you need money in some cases, in another cases you sale at 2nd market, it's almost liquid if buy at brokerage, at Treasury Direct you have hold window till transfer to sell at 2nd market
1st month is over now and 2nd month have reinvested and did not receive money.
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1st month is over now and 2nd month have reinvested and did not receive money.
1st month is over now and 2nd month have reinvested and did not receive money.
Example if a $1k TBill is originally purchased and the auction-result cost for that bill is (hypothetically) $950, then at the end of 4 weeks the $50 earned is deposited to my bank account and TD "purchases" for me another TBill at the current auction price. (This is a very general example and is fluid depending on the auction-result costs each period.) This then keeps going until the reinvestment period that I've specified ends, then TD will deposit the entire $1k plus the last earned amount into my bank account and it's done.
I check my bank account and the "profit" indeed is posted in my account every duration as a direct deposit from TD.
If I select funding source to bank "Chase" and the payment destination to bank "Wells Fargo", once reinvestments are over, does all the money go back to payment destination or is it split between chase for the funding amount and Wells Fargo for the "interest"?
Reason is because I need my proceeds to go to a different bank and the remaining money that was used to fund the investments back to my "chase" bank.
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Set to use "Zero-Percent C of I Total" for redemption destination for I Bond. you will get cash there in 2-3 days
And you can place the order for TBill , where the issue date is on or after the redemption date, that you will see upon.
my 2c
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