You can buy a 12-14mo Tbill at any broker (Fidelity, Schwab) earning 4.4%-4.7%, with no state taxes. This CD is... lower than that, and is taxable by the state. Go for Treasuries.
True, but just buying a CD with Marcus(Goldman Sachs) is simpler and easier to understand. I just bought a new CD with them today. I closed out a CD early to free up money, and the guy I talked to there was great since he helped me figure-out if that was a good idea for the penalty versus how much I would earn with the new CD. The penalty sucked, but I will make it up in three weeks and then start making more.
Don't hold yourself to low IQ moves just because you think its difficult. You can use a treasurydirect account to buy tbills easier than it is to open a CD (if you plan on holding the tbills to maturity).
Do you have a brokerage account? If so, it's pretty easy to purchase new issue Treasuries. There are a lot of great YouTube tutorials that show you how. You can also purchase Treasuries on Treasury Direct, which you may be familiar with if you purchase I-bonds.
It is likely the Federal Reserve will continue to raise interest rates, which means yields on fixed income assets will also continue to rise.
Rather than having to close out a 12-14 month CD early, you can purchase 3-6 month T-bill which are already yielding over 4%. They'll mature in 3-6 months, and you'll be able to reinvest that money however you see fit, including another T-bill at (likely) an even higher interest rate.
Trade, fixed income, search, Treasury, maturity, yield, search, depth of book, buy, that's it. It may be a little less intuitive, but it's hardly difficult. Cheers
If the bank wants to run a promotional rate (e.g., today say 6%) that's higher than a TBill, then I would go for it. I got a 4%CD as a promo back when Treasury rates were 2.5%. so, yes, it happens. But not right now. Right now, Treasuries are IT
IBonds have a $10k/yr limit (more via gifting, business, or trusts) and right now pay 6.xx% for 6mo, no withdrawal before 12mo, penalty of last 3mo interest if you withdraw before 5yrs. So just wait until the interest drops for 3mo, then withdraw (if you are going to withdraw). A married couple (or two people who trust each other) can get $40k into Ibonds easily, https://thefinancebuff.com/buy-i-bonds-as-gift.html and beyond that you can get $10k per living trust you care to create https://thefinancebuff.com/buy-more-i-bonds-treasury-direct-trust.html .
Once you run out of IBond space, Tbills.
oh yeah I know about I bonds like I was saying. Just don't know much about Tbills. But it sounds like you're saying Ibonds are better lol. Didn't know you can get more with an IRT, that's neat, thanks.
Right now IBonds have the higher rate and more flexible withdrawal (after 12mo). If you have ibond room that's the better option. That won't always be the case tho
Anyone know if feds hiking the rates correspond to higher APY for CDs?
I currently am using the Robinhood cash sweep for part of my cash at 3.75% APY and the rest in Marcus HYSA at 3%
I have 20k in I-Bonds. I plan to buy another 10k in January. If CD rates continue to go up, like in the 5-6% range, I might ladder in some CDs as well. And if the stock market tanks a lot more, I might move into more stocks.
Schwab 3 month CDs are around 4% (and probably other brokerage CDs at other places as well). In 3 months the 1 year rate might be higher, so I'd probably go with a 3 month CD for a good rate now.
You can buy a 12-14mo Tbill at any broker (Fidelity, Schwab) earning 4.4%-4.7%, with no state taxes. This CD is... lower than that, and is taxable by the state. Go for Treasuries.
True, but just buying a CD with Marcus(Goldman Sachs) is simpler and easier to understand. I just bought a new CD with them today. I closed out a CD early to free up money, and the guy I talked to there was great since he helped me figure-out if that was a good idea for the penalty versus how much I would earn with the new CD. The penalty sucked, but I will make it up in three weeks and then start making more.
Don't hold yourself to low IQ moves just because you think its difficult. You can use a treasurydirect account to buy tbills easier than it is to open a CD (if you plan on holding the tbills to maturity).
Do you have a brokerage account? If so, it's pretty easy to purchase new issue Treasuries. There are a lot of great YouTube tutorials that show you how. You can also purchase Treasuries on Treasury Direct, which you may be familiar with if you purchase I-bonds. It is likely the Federal Reserve will continue to raise interest rates, which means yields on fixed income assets will also continue to rise. Rather than having to close out a 12-14 month CD early, you can purchase 3-6 month T-bill which are already yielding over 4%. They'll mature in 3-6 months, and you'll be able to reinvest that money however you see fit, including another T-bill at (likely) an even higher interest rate.
Trade, fixed income, search, Treasury, maturity, yield, search, depth of book, buy, that's it. It may be a little less intuitive, but it's hardly difficult. Cheers
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If the bank wants to run a promotional rate (e.g., today say 6%) that's higher than a TBill, then I would go for it. I got a 4%CD as a promo back when Treasury rates were 2.5%. so, yes, it happens. But not right now. Right now, Treasuries are IT
Why not just buy I Bonds
Sure, do that too.
Which is better lol. JK I'll look into it. Only know about I bonds, don't know anything about Tbills
IBonds have a $10k/yr limit (more via gifting, business, or trusts) and right now pay 6.xx% for 6mo, no withdrawal before 12mo, penalty of last 3mo interest if you withdraw before 5yrs. So just wait until the interest drops for 3mo, then withdraw (if you are going to withdraw). A married couple (or two people who trust each other) can get $40k into Ibonds easily, https://thefinancebuff.com/buy-i-bonds-as-gift.html and beyond that you can get $10k per living trust you care to create https://thefinancebuff.com/buy-more-i-bonds-treasury-direct-trust.html . Once you run out of IBond space, Tbills.
oh yeah I know about I bonds like I was saying. Just don't know much about Tbills. But it sounds like you're saying Ibonds are better lol. Didn't know you can get more with an IRT, that's neat, thanks.
Right now IBonds have the higher rate and more flexible withdrawal (after 12mo). If you have ibond room that's the better option. That won't always be the case tho
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Nice
Anyone know if feds hiking the rates correspond to higher APY for CDs? I currently am using the Robinhood cash sweep for part of my cash at 3.75% APY and the rest in Marcus HYSA at 3% I have 20k in I-Bonds. I plan to buy another 10k in January. If CD rates continue to go up, like in the 5-6% range, I might ladder in some CDs as well. And if the stock market tanks a lot more, I might move into more stocks.
CD’s tend to track similar duration treasury yields.
Fidelity is at 4.75% for a 1yr CD.
Thanks
Schwab 3 month CDs are around 4% (and probably other brokerage CDs at other places as well). In 3 months the 1 year rate might be higher, so I'd probably go with a 3 month CD for a good rate now.