![]() ![]() You’ll still get the full government protection and get the requisite tax information you need. Still, Bishop not only feels comfortable with his clients going through brokers for T-bills, but also recommends it. You’re not giving up a huge cut, but enough to impact a $50 return. There’s a bit more flexibility and information available at purchase when you go through a broker, but some may charge you for that convenience. Also, you won’t have immediate liquidity during the term of the bill and would have to jump through some hoops to sell.Īt the time of purchase, you can choose to automatically reinvest your purchase after maturity for up to two years, or you can schedule the funds to land in your bank account and figure out what to do next from there. You can check current yields in other places, but it won’t be right there when you purchase. But you won’t see the price or the exact yield until you actually get the sale confirmation. The biggest quirk is that when you buy at auction, you select a duration and an auction date – say 8 weeks set to sell on May 11 and be issued on May 16. Also, your holdings are not easily integrated with the rest of your money, so it’s hard to see it all in one view. But the Treasury website is notoriously wonky, and has many layers of security. ![]() ![]() The process is not onerous – you create an account, attach a bank account and click buy, just like any other retail purchase. You can purchase new Treasury bills at auction directly from the U.S. You have three buying choices for Treasury bills in your ladder, and each comes with its own pros and cons. If things shift considerably between rungs, he contacts clients and talks about accelerating the process, cashing out of an existing Treasury position and buying new securities that have better rates. When one rung comes up, he looks at market conditions and decides where to deploy the free cash next. Bishop structures fixed-income ladders for his clients, which means you hold fixed-income investments at various maturities all in a row. What you really need is a long-term solution as an individual investor, whether you have professional help from a financial adviser or are going at it alone. “We see very little risk premium in moving right now from shorter-term T-bills to longer-dated corporate or municipal bonds,” says Scott Bishop, a Houston-based certified financial planner with Avidian Wealth Solutions. But with short-term Treasury bills in a volatile market, there’s no guarantee that when you go to rollover your investment for another round the rate will be as high – or higher than you could get with a CD, high-yield savings account, another duration of Treasury security or even Series I bonds. Yes, you can do this over and over and earn a nice amount of interest relative to your principal. On $1,000, you’re talking about a $50 profit. Those types of investors are moving around mounds of money every day.īut what if you’re just a regular person investing on their own? It sounds great to earn more than 5% on a risk-free investment, but if you’re only putting in part of your cash bucket for a few weeks, you’re going to earn pocket change – and owe taxes on the gain and potentially pay fees. ![]() If your portfolio is worth billions, like financier Bill Gross, or you’re managing institutional money in the trillions, that kind of quick moving strategy makes sense. ![]()
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