6 month treasury bill - 4.48%

[resjudicata]

@basedluther

Can I sell out at any time after 6 months?

Are you buying these thru treasury direct? or thru your broker? It matters.

TD does not allow you to sell before the maturity date.

Your broker will allow you to buy and sell at any time.

 

[sylviab]

@resjudicata What is the ticker in TD for these?

 

[resjudicata]

@sylviab No ticker. Td is treasury direct

 

[sylviab]

@resjudicata Oh my mistake. I thought you meant TDAmeritrade.

 

[albertmadin]

@sylviab Even then on brokerages they don't have a ticker symbol unless you are buying into a fund that purchases the notes rather than purchasing directly.

 

[resjudicata]

@basedluther Ibonds rate is high 6% for six months plus whatever rate is determined for following six months. Note there are caps on max investable

 

[powerwindow]

@resjudicata I was thinking the same thing. I bonds are 6.89% right now, so that is what I am investing in. Of course I have no idea what the next 6 mo. rate is going to be, so I'll be stuck with it. Which is fine.

 

[resjudicata]

@powerwindow Even if it’s 4%. You typically, that’s still an average of 5.5% over a year which is higher than r bonds. Most likely it’s 4.5 to 5% (a total guess) and that puts you at 6%.

Vanguard settlement is 3.7% and you basically just have to exist to get that.

 

[cflowers87]

@resjudicata But it's locked up for a year and you lose 3 months interest if you cash within 5 years. If you just did a year and lose 3 months of 4.5%, your 6% average drops to ~4.5% for the year.

I-bonds were a hot item in the inflationary market over the last 18 months, but they are rapidly becoming less enticing with rates for everything else rising. HYSA are exceeding 3%.

 

[resjudicata]

@cflowers87 Same math for keeping it for 15 months? So the 3 months I sacrifice is less. No sarcasm and thanks in advance.

 

[cflowers87]

@resjudicata Correct, you lose the final(not lowest) 3 months of interest, unless you keep it 5 or more years.

If you keep it 18 months, you will be paid the first 15 months of interest.

 

[resjudicata]

@cflowers87 I should’ve been more specific. What does the math calculate on my suggested approach? Keep for 15 months (assuming 6% average for 12 months and 4% in month 13-15).

 

[cflowers87]

@resjudicata 6% average through 12 months, 0% for months 13-15. 4.8%

Marginally better, but still no where near the 6% average without the 3 month loss.

 

[tildav]

@cflowers87 So do a year and 3 months- rates were as high as 9.6%. You only lose 3 months of the last posted interest rate…

 

[cflowers87]

@tildav "Were" is the keyword. They are not 9% anymore and not expected to be anytime soon. At the same time they were 9%, HYSA were 1%.

9.6/6.9 over 15 months is 6.6% annualized, if you bought back at 9.6.

Now with the rate at 6.9% and the next rate likely to be in the 4's, your 15 month return is 4.5%.

HYSA are now in the 3s, CDs in the 4s. Thus i-Bond is out, there are better places to park your money at this time.

 

[tildav]

@cflowers87 actually the last 3 months is 0 return, so 9.6 + 6.9 = 16.9. 16.9/2 =8.45. 8.45/(15/12) = 6.76%. I'll take it...
my logic is 6 months at 9.6% APR, 6 months at 6.9% APR, 3 months forfeited (0)…

 

[cflowers87]

@tildav 9.6 + 6.9 = 16.5 ....... 6.6%

And again, you can't get that rate anymore.

 

[tildav]

@cflowers87 But I already Have that rate!