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Why pay a management fee when you can buy 1-3 month treasury bills so easily through any brokerage? Simply a convenience fee/ease of use question?
Short term auctions take almost a week to settle. Most brokerage houses keep your money in a fund with interest between buying and settlement. Treasury direct takes the money on the settlement date. Schwab keeps your money for the week no interest. On auto roll
over as well at Schwab so on a 4,8 or 17 week t-bill you lose a week of interest every time you buy at auction. Even the one year auction sometimes takes 2 days to settle and sometimes a week. the 2 year next week on Tuesday doesn't settle till the following Tuesday. Other months the auction has been on a Tuesday but settled a couple of days later on Thursday.
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10-20-2023 at 12:07 PM.
Quote
from if200
:
Short term auctions take almost a week to settle. Most brokerage houses keep your money in a fund with interest between buying and settlement. Treasury direct takes the money on the settlement date. Schwab keeps your money for the week no interest. On auto roll
over as well at Schwab so on a 4,8 or 17 week t-bill you lose a week of interest every time you buy at auction. Even the one year auction sometimes takes 2 days to settle and sometimes a week. the 2 year next week on Tuesday doesn't settle till the following Tuesday. Other months the auction has been on a Tuesday but settled a couple of days later on Thursday.
The above is true for Schwab, and hence the reason I don't use them. Use Fidelity (more clunky web site) - they keep your money in the sweep acct until the T-bill purchase clears for the 3-5 days it takes. They do not make money off the interest between the day of auction until the T-bill clears. The default sweep on Fidelity is SPAXX which pays 4.9x interest currently. Also if you auto-roll on Fidelity they will purchase the next T-bill for the same duration as the expiring bill the WEEK before so that you are not left out of the week of interest due to the nature of AUTOROLL
The above is true for Schwab, and hence the reason I don't use them. Use Fidelity (more clunky web site) - they keep your money in the sweep acct until the T-bill purchase clears for the 3-5 days it takes. They do not make money off the interest between the day of auction until the T-bill clears. The default sweep on Fidelity is SPAXX which pays 4.9x interest currently. Also if you auto-roll on Fidelity they will purchase the next T-bill for the same duration as the expiring bill the WEEK before so that you are not left out of the week of interest due to the nature of AUTOROLL
Better yet, don't buy tbill in auction. Buy it open market and the transaction settle same day.
You get to be a millionaire by saving -- not wasting -- money. And slickdeals has saved me a bunch over the years.
Knew a guy who valet paked rich guys cars, said some of them always had fast food/grocery coupons laying everywhere or stuffed in the cupholders/doors etc lo. these were multimillionaires with rolls royces, lambos etc.
sounds like it may be a down payment for something if you need it in a year. diversify between some treasuries and maybe buy them stagger with 3 months expiration?
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from redeyedog
:
So can someone recommend a good treasury to invest in right now?
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from SplendidSquirrel285
:
Alright, so I've got 45k to invest. I'd like to pull it out 12mo from now.. what's the best route? I almost put it all into Bread CD @ 5.6%.
Our community has rated this post as helpful. If you agree, why not thank mblock66
10-20-2023 at 02:35 PM.
Ladder 3 month T-bills in 2 week increments! You will thank me later! Locking any money up for 12 months or more is leaving money on the table. When I started this 2 years ago I was getting 4.25ish I think. I have been able to get that money OUT in 13 weeks and reinvest in the rate that is now 5.5% along the way. Anyone that locked into a 12 or 24 month CD back then at say 4% is still only getting 4% and they are paying state tax on the interest.
Until rates start to FALL you stay as short as you can and ladder. Then once they start to fall you lock into LONG term to retain that. Make your money make you money without having to think about it or worry about risk. We have a significant about of money constantly investing in 3 month T Bills every 2 weeks. It's the way to go right now for low risk decent return investors in the current market.
Ladder 3 month T-bills in 2 week increments! You will thank me later! Locking any money up for 12 months or more is leaving money on the table. When I started this 2 years ago I was getting 4.25ish I think. I have been able to get that money OUT in 13 weeks and reinvest in the rate that is now 5.5% along the way. Anyone that locked into a 12 or 24 month CD back then at say 4% is still only getting 4% and they are paying state tax on the interest.
Until rates start to FALL you stay as short as you can and ladder. Then once they start to fall you lock into LONG term to retain that. Make your money make you money without having to think about it or worry about risk. We have a significant about of money constantly investing in 3 month T Bills every 2 weeks. It's the way to go right now for low risk decent return investors in the current market.
Ladder 3 month T-bills in 2 week increments! You will thank me later! Locking any money up for 12 months or more is leaving money on the table. When I started this 2 years ago I was getting 4.25ish I think. I have been able to get that money OUT in 13 weeks and reinvest in the rate that is now 5.5% along the way. Anyone that locked into a 12 or 24 month CD back then at say 4% is still only getting 4% and they are paying state tax on the interest.
Until rates start to FALL you stay as short as you can and ladder. Then once they start to fall you lock into LONG term to retain that. Make your money make you money without having to think about it or worry about risk. We have a significant about of money constantly investing in 3 month T Bills every 2 weeks. It's the way to go right now for low risk decent return investors in the current market.
Where can i find out more about this? im an absolute newbie whos simply put money into a roth for the last decade but looking to expand and like the idea of not having money locked up at the present time
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over as well at Schwab so on a 4,8 or 17 week t-bill you lose a week of interest every time you buy at auction. Even the one year auction sometimes takes 2 days to settle and sometimes a week. the 2 year next week on Tuesday doesn't settle till the following Tuesday. Other months the auction has been on a Tuesday but settled a couple of days later on Thursday.
Our community has rated this post as helpful. If you agree, why not thank oonchie
over as well at Schwab so on a 4,8 or 17 week t-bill you lose a week of interest every time you buy at auction. Even the one year auction sometimes takes 2 days to settle and sometimes a week. the 2 year next week on Tuesday doesn't settle till the following Tuesday. Other months the auction has been on a Tuesday but settled a couple of days later on Thursday.
I am able to buy the next one on the day of due date (?). There's no gap inbetween at all.
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You get to be a millionaire by saving -- not wasting -- money. And slickdeals has saved me a bunch over the years.
Knew a guy who valet paked rich guys cars, said some of them always had fast food/grocery coupons laying everywhere or stuffed in the cupholders/doors etc lo. these were multimillionaires with rolls royces, lambos etc.
Our community has rated this post as helpful. If you agree, why not thank mblock66
Until rates start to FALL you stay as short as you can and ladder. Then once they start to fall you lock into LONG term to retain that. Make your money make you money without having to think about it or worry about risk. We have a significant about of money constantly investing in 3 month T Bills every 2 weeks. It's the way to go right now for low risk decent return investors in the current market.
You don't get rich or stay rich by paying full price.
Until rates start to FALL you stay as short as you can and ladder. Then once they start to fall you lock into LONG term to retain that. Make your money make you money without having to think about it or worry about risk. We have a significant about of money constantly investing in 3 month T Bills every 2 weeks. It's the way to go right now for low risk decent return investors in the current market.
Sign up for a Slickdeals account to remove this ad.
Until rates start to FALL you stay as short as you can and ladder. Then once they start to fall you lock into LONG term to retain that. Make your money make you money without having to think about it or worry about risk. We have a significant about of money constantly investing in 3 month T Bills every 2 weeks. It's the way to go right now for low risk decent return investors in the current market.
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