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Message
re: Recent t-bill auction results--rates--
Posted on 3/8/23 at 10:59 am to bbap
Posted on 3/8/23 at 10:59 am to bbap
Doesn't matter yield is yield.
Capital One loves the folks that buy their CDs or put money in the savings account at the rates they are paying. They can simply buy Tbills with the money people deposit and make the spread---about 20%
Capital One loves the folks that buy their CDs or put money in the savings account at the rates they are paying. They can simply buy Tbills with the money people deposit and make the spread---about 20%
2
Posted on 3/8/23 at 12:13 pm to I B Freeman
i definitely used to be one of those people. But no longer.
Posted on 3/8/23 at 4:19 pm to I B Freeman
quote:
Doesn't matter yield is yield.
Exactly. Depending on goals and situation, just take advantage of whatever yield advantage is there, whether it’s with $1000 or $100,000.
Posted on 3/11/23 at 6:44 am to Jag_Warrior
So I have $10k to buy bills. Say a 3 month one. What will be my return each month / end of the term ? The calculator Was a little confusing to me
Posted on 3/11/23 at 8:06 am to lsufan112001
I'd like to know this was well. My heloc is at 2.99% for a year. Was thinking about putting all 500k in one of these. 
Posted on 3/11/23 at 11:10 am to bbap
How are y’all buying these?
T Direct?
T Direct?
Posted on 3/11/23 at 11:20 am to bayoubengals88
Through the Treasury Is there a better way ?
Posted on 3/11/23 at 11:52 am to lsufan112001
I assumed not.
Are you folks telling me that I can make over $400 on 10,000 in just four weeks?
Can I do it again the next month?? And the one after that???
Are you folks telling me that I can make over $400 on 10,000 in just four weeks?
Can I do it again the next month?? And the one after that???
Posted on 3/11/23 at 12:00 pm to bayoubengals88
Treasury Direct is one option. It’s really not that bad of a site (especially considering that it’s a government site). Depending on who your broker is, that’s another option. I’ve bought a few through Treasury Direct, but I mostly buy through TD Ameritrade. Someone mentioned preferring CDs because they might want to use them as collateral. But most any bank that offers brokerage services (BofA/Merrill, Wells, etc.) would allow treasuries held in the account to be offered as collateral. I’ve never talked to anyone at my credit union about buying treasuries. So I have no idea about that. Probably not, as I’m sure most CUs and smaller banks would prefer you buy CDs from them (especially now).
Posted on 3/11/23 at 12:01 pm to bayoubengals88
quote:
Are you folks telling me that I can make over $400 on 10,000 in just four weeks?
No. All yields are annualized yields.
Posted on 3/11/23 at 1:23 pm to lsufan112001
quote:
Through the Treasury Is there a better way ?
You can buy (both auction & secondary) at the major brokerages. I buy mine at Fidelity. By using the brokerages, you can also then sell them if you need to before maturity.
Posted on 3/11/23 at 1:30 pm to gpburdell
So the return for a whole year is almost 500$ on a 10k buy ?
Posted on 3/11/23 at 1:43 pm to lsufan112001
quote:
So the return for a whole year is almost 500$ on a 10k buy ?
If you bought a 1 year T-bill yes. You could buy shorter duration and roll them over for a year and get the same. Though you run the risk of rates going down. Or rates could go up.
Also if you're buying in a taxable account, treasuries are exempt from state taxes. So the tax effective yield is higher compared to regular interest.
Posted on 3/11/23 at 5:00 pm to bayoubengals88
quote:
How are y’all buying these?
T Direct?
That's what I do, yes
Posted on 4/3/23 at 4:01 pm to I B Freeman
[/img] History from recent bills auctions. Remember the interest from these are state income tax free but not federal income exempt.
This post was edited on 4/3/23 at 4:04 pm
Posted on 4/3/23 at 4:15 pm to lsufan112001
Ok lets say you had bought the last 13 week bill at auction. You wanted $10,000 worth of bills. The treasury sells you those bills at a discount that yield the rate they show. Using 4.919% they would have sold those to you for about $10000=($491.90/4)=$9877.02. At the end of the 13 weeks they would give you $10000---you have that direct deposited in your checking account or reinvested. You would have made $122.78 in interest for the quarter.
You divide by four because 13 is 1/4th of a year and the rate is the annual rate.
The other poster asked about $500K. The math is simply 50 times more. He would receive $6139.
(You can have your broker buy them. I buy from Treasury Direct just because the risk is zero. No broker risk. If I decided to use them as margin or collateral or sell them early I would simply order them transferred from Direct to my broker. Your broker will happily assist with that process but it is simple.)
You divide by four because 13 is 1/4th of a year and the rate is the annual rate.
The other poster asked about $500K. The math is simply 50 times more. He would receive $6139.
(You can have your broker buy them. I buy from Treasury Direct just because the risk is zero. No broker risk. If I decided to use them as margin or collateral or sell them early I would simply order them transferred from Direct to my broker. Your broker will happily assist with that process but it is simple.)
This post was edited on 4/3/23 at 4:19 pm
Posted on 4/3/23 at 9:05 pm to I B Freeman
Thanks for the update. I don’t always follow the yields on a daily basis. Will probably lock in some 26 week or greater durations before the next meeting/announcement. Can always ladder in a few more if the rates happen to pop a bit.
Posted on 4/4/23 at 4:07 am to I B Freeman
Are I bonds also exempt from state tax also?
Posted on 4/4/23 at 5:30 am to Kipsgto
quote:
Are I bonds also exempt from state tax also?
Yes.
quote:
The interest that your savings bonds earn is subject to federal income tax, but not state or local income tax
Treasury: Tax information for EE and I bonds
Posted on 4/4/23 at 8:54 pm to I B Freeman
Thanks IB. Nice explanation
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