Buying Treasury bills - great choice for cash reserves

[disneysteve]

I've recently gotten into buying treasury bills. You can currently buy 12-18 month bills that are paying 2.0 to 2.3%.

It's amazing how quickly things have changed since I started this thread in April.

I just bought a 3-month T bill for 3.157% and a 6-month for 3.519%.

If you still have cash sitting around in savings accounts, you really ought to consider putting at least some of it in T bills even short term. Even 1-month T bills are paying 3.16%. Most high yield savings accounts are now around 2% so you can earn 50% more just by locking up the money for a month.

[LivingAlmostLarge]

Okay I'm in. I will go and lock up some of our money. I find it just annoying to move money around.

[disneysteve]

Okay I'm in. I will go and lock up some of our money. I find it just annoying to move money around.

I’ve gradually moved the bulk of our portfolio to Vanguard. About 2/3 of everything is there now. So it’s just a matter of logging into our account and making whatever transactions I want. We do still have 2 CDs at Ally that mature next month. Then I’ll move that money to Vanguard too.

[henry90]

Treasury bills are one way to accomplish savings goals, and the effort is certainly better than most Americans make. However, I think this is THE definitive moment for I-Bonds. Now that the rate is almost 10% (which is already higher than the long-term S&P annual return), and since the risk is virtually zero, I-Bonds are arguably the SAFEST place to put money and watch it grow right now.

I too agree !

[LivingAlmostLarge]

But i bonds are limited to $10k/year per SSN

[disneysteve]

1 year T bills are a hair under 4%. When the Fed raises rates next week that will probably push them over the 4% mark.

[Thrif-t]

Thank you for this thread, Disneysteve because it got me thinking!!

I sold some winners in my 401k when the market was up and the money has just been sitting in my stable/cash account. I can direct some of this money to my PCRA (personal choice retirement account) and buy CD's & Treasuries with it. I'd of never thought to do that! Those interest rates are better than the 2% I'm earning on the cash account, so thanks!

I love learning new things!!

[disneysteve]

Thank you for this thread, Disneysteve because it got me thinking!!

I sold some winners in my 401k when the market was up and the money has just been sitting in my stable/cash account. I can direct some of this money to my PCRA (personal choice retirement account) and buy CD's & Treasuries with it. I'd of never thought to do that! Those interest rates are better than the 2% I'm earning on the cash account, so thanks!

I love learning new things!!

You're very welcome. I only learned about T bills this year myself but I'm doing my best to spread the word. Even 3-month T bills are at 3.3% which is a nice bump up from 2% without locking up your money for a long period. And if you can put some away for longer, you can get over 4%.

I think right now, a ladder with 3, 6, 9, and 12-month bills is a good way to do it. Then a chunk matures every 3 months and you buy a new 12-month bill. That's exactly what I recently did for my mom when a couple of her CDs matured.

[LivingAlmostLarge]

me too! I am buying a few treasuries

[Thrif-t]

Hey guys, I learned about this lady on YouTube, I think you might like her. She has very informative tutorials on all thing financial, this is one on T-Bills.

https://youtu.be/jIBn3VFkDw8

[james.hendrickson]

Hey guys, I learned about this lady on YouTube, I think you might like her. She has very informative tutorials on all thing financial, this is one on T-Bills.

https://youtu.be/jIBn3VFkDw8

nice find, thanks thrify-t.

[QuarterMillionMan]

Upon maturity do these Treasury bill automatically pay out and the funds appear back in my brokerage account?

[disneysteve]

Upon maturity do these Treasury bill automatically pay out and the funds appear back in my brokerage account?

Yes they do.

3-month bills are now over 4%. Amazing for short term money.

[QuarterMillionMan]

Thanks disneysteve. When I click on my purchase of treasury bills nothing appears and it says something like "not found." All it shows is the gain/loss and mines is currently showing -$30 loss which doesn't seem right and shouldn't it be something like +$30 gain or something positive. Why is it showing negative?

[disneysteve]

Thanks disneysteve. When I click on my purchase of treasury bills nothing appears and it says something like "not found." All it shows is the gain/loss and mines is currently showing -$30 loss which doesn't seem right and shouldn't it be something like +$30 gain or something positive. Why is it showing negative?

You are looking at the current market value of the bill if you were to sell it today. As long as you keep it until maturity, that's totally irrelevant. You won't see the full face value until it matures.

With Vanguard, they post the bond redemption and the interest earned as two separate line items. Other brokerages just post the total.