sgb said:Does anyone know when Treasury withdraws money from the account? I need to transfer money to my linked account to cover the purchase. Is it on the day of the auction, or later?

TIA

Although I haven't tried it myself, it appears the money is withdrawn on the issue date, not the auction date. Makes sense that way, the government isn't as bad as ING, HSBC, etc. about holding your money. I found a great collection of experience on MyMoneyBlog at this link. The specific entry detailing how the blogger purchased a bill and when the money was withdrawn is here.

My 4 week auction is tomorrow..

I'm thinking Presidential Savings at 4.37% ain't so hot with t-bills auctioning much higher these days. Would you advise closing regular savings for this? Just curious to your opinion.

The problem with the savings account at Presidential is there is a 5K minimum, and there would be a monthly fee if balance dropped below. Frankly I'm disappointed Presidential is not keeping up, normally it has been a leader in the rate field which I rationalized becuz of the minimum.

mariojm said:tooshy said:I'm thinking Presidential Savings at 4.37% ain't so hot with t-bills auctioning much higher these days. Would you advise closing regular savings for this? Just curious to your opinion.

The problem with the savings account at Presidential is there is a 5K minimum, and there would be a monthly fee if balance dropped below. Frankly I'm disappointed Presidential is not keeping up, normally it has been a leader in the rate field which I rationalized becuz of the minimum.

If you're thinking about closing the account, and you believe there may be several days of interest loss involved, I'd advise you to think carefully about it. There's about 0.5% advantage, which has to be maintained several weeks to make up for several days of interest loss. Perhaps you could link your Presidential to TD, buy a T-bill with most of your balance in Presidential, then close your Presidential? Or would there still be a fee for you? I'm not sure what your options are for withdrawing if you're closing it.

Also be sure to think of the differences between a T-bill and a savings account before you jump into it. Savings account rates may keep going up (knock on wood) but if you buy a T-bill now, that'll be the rate you'll get till maturity. (If you plan to sell it before, it's a slightly more complicated comparison.)

Actually, 4.37% ain't that bad. Still beats ED's 4.25% which used to be a long term rate leader. We can't predict what HSBC and ING will do after their "sale" promotions end in April.

My plan is to fund T-bills purchased in TD directly from my HSBC account... so if HSBC drops, I'll jump into T-bills.Thanks for your reply. I wouldn't normally think of closing a bank account but it has a 5K minimum which forces you to keep your money there or close. I could leave 5K there indefinitely but what's the point. If this keeps up, I may consider closing.

I read in other forums that some expect t-bill to rise to 7% (then jump to longer holdings), a t-bill ladder might work for now, and like you I think it is a good move away from lower rate savings. I guess I wasn't quite sure of my thoughts, glad to hear t-bills is your move from HBSC promotional rate.

I guess, maybe I could do this in increments. Set up the ladder now and not worry about closing Presidential for now. Don't know why I'm suddenly impatient. Reading this forum too much....

You're right you could accomplish the same with 6mo CD ladders I guess...the difference really only is the state tax savings. I'm not talking about a lot of money so the point is very moot...just thinking what to do with savings that I don't want tied up in longer term CDs. Actually it will be a bigger problem the longer inverted yields hold out. OK I'm not going there again....

Compared to our local credit union's pathetic 1%....I'm should be pretty satisfied with ING/Presidential I suppose...

goldsheet said:mariojm said:
Folks (we) are on the right track: buy them direct or from no-fee broker, think of them
like 6 month CDs, hold to maturity. avoids fess, save state taxes. Works for me, YMMV.

Works for me, too. Too bad my state doesn't have a state income tax, no additional savings. Wait ... good ... good! Hehe...

Also, as far as no-fee brokers are concerned ... I'm guessing they'll take their own cut out of the yield, though? How about for bonds directly from auction held to maturity, would they still take a cut? Otherwise, why would they even offer to broker such bonds?

mariojm said:tooshy said:I read in other forums that some expect t-bill to rise to 7% (then jump to longer holdings), a t-bill ladder might work for now, and like you I think it is a good move away from lower rate savings.

Where did you read about the 7%?I think it was Morningstar discussion about bond rates (Market Insight), now where did they get it?

discussion

Just one person (maybe there was another) who suggested it, so don't take this to mean anything...I was just throwing it out as a possibility, and frankly why not. As you can see from the viewpoints of the posters, most are very bearish. I believe 7% may not be far off. Couple that with a few other issues discussed in that forum and you get a pretty nice gloom and doom picture.

I used a bankrate.com CD rate finder and found Nexity Bank to have favorable rates and terms. So I don't know which to go with. It can be quite confusing to keep track if you space your ladder too close.

tooshy said:I think it was Morningstar discussion about bond rates (Market Insight), now where did they get it?

discussion



Thanks for the link, definitely an interesting discussion to read. However, they are mostly concerned with longer term treasuries and it's a mixed discussion of returns from the change in price of the bonds and the bond yields themselves. So far I've been trying to focus on short term treasury yields in this thread, but of course long term definitely is also worth discussing. I believe the 7% referred to 10 year Treasuries after the yield curve reverts ... interesting prospect, though.

CornHusker said:NM

The eyes of Texas are upon you!

Beware! For those with money in TD, make sure your child doesn't steal your savings.