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

Thanks for the link to the thread! I have mixed feelings whether this story is credible. But it does bring up an interesting security issue in TD ... for someone else to redeem a security from your account would not be easy (would have to open a bank account in your name to redeem), but if someone could get access to your TD account, for savings bonds they could change the registration of the bond, grant themselves view and transact rights, and redeem the bond in their name into their bank account from their TD account. Of course, there would be a trail (would show the history of the registration change and the name and SSN of who it's been changed to) so you could go after that person. Disproving that you initiated the change in registration might not be easy, esp. if it is a family member. If it's a total stranger, I would imagine it is easier to prove that you wouldn't have registered the security in both your names.

Any thoughts on this or TD security in general?

Welcome "Bank Deals" blog readers! I noticed this thread was featured today on the Banking Guy's blog. I encourage FWers to check out his blog too, I find it a very thorough and up to date collection of bank deals and he often refers back to other FW threads:

http://bankdeals.blogspot.com

I'm proud to announce that this thread has made it to the top ten results (first page) in Google when searching for:

6 month treasury bill
6 month treasury bills

Now let's go and make it number one! We just need to beat Bloomberg.
Thanks to all who are contributing to make this a useful resource!

P.S. Maybe I cheated a little bit... if you google 182 day Treasury bill we're No. 79.

EDIT: Looks like we fell out of the Top 10 as soon as we were in. But it's the olympic spirit, that counts.

goldsheet said:Looking good !

6 month t-bills have worked out so well for me
I have been buying them instead of 6 month CDs
4.84 APY% equivalent t-bill even beats the great
World Saving 5.26% APY 6 month CD special, when
I take the 9.3% state tax bracket into account.

Yeah, it looks like they are still going up, but the last two weeks they've been kind of stagnant. At the same time, the yield curve went through a crazy reversion and inversion. Looks like the recent contained inflation numbers added some questions as to how far and fast the Fed Funds rate will go.

Since you bring up the World Savings 5.26% CD special, my state has no state tax so I'm seriously looking at that CD instead. For an extra half percent over 6 months I'm willing to forgo the one-click convenience of T-bills. But they are definitely cooler, though.

Any interest rate predictions on upcoming Fed meeting (3/28) ??

4.775 today, waiting for FED raise the rate...

Thanks CornHusker and Sweetcash for looking up the rates and calculating the entries in the quick summary. Updated the original post accordingly. Maybe I should change the title ... "rate leader" sounds kind of lame now that the rate has been effectively flat ~ 3-4 weeks with a little spike one week after the original post (maybe because all FWers jumped into it and increased demand?).

Any thoughts on why it's been flat and if we're potentially at a turning point already? I don't think the next rate hike will influence the rate that much since the market already anticipates this rate hike. Investors might be more worried about future rate hikes/economic outlook and perhaps that's why it's not going up any further at this time.

yeah, not bad at all, a whole .1 percent more than 91-day bill.

KwadGuy said:Three basic questions:

If I buy 28 day T-Bills, is there any way to set things up so the money continually gets rolled over into the next product unless I say otherwise, or do I have to remember, every 28 days, to do the rollover myself?

Will I know the rate upfront? That is, am I buying at the rate set at the last Treasury auction? I have a set amount of money to invest, and since it seems you purchase bills on the basis of their value at maturity (meaning the amount they cost will vary depending on the rate), if I don't know the rate upfront I won't be able to be sure I'll be investing all my money...

When setting up an account at TreasuryDirect, why do they need an account/routing number from my bank? Is this the account from which they will be taking the money for my purchases/into which they will be depositing the money from my purchases?

Kwad

Your're right, these are basic questions. Sounds like you need to do a lot more reading before you put your money in. To be brief:
1. Yes, you can set to rollover.
2. No, it's called an "auction" for a reason -- the price/yield are set when the auction closes, after you've placed your bid.
3. Yes. Alternatively you can keep money at TD (like at a brokerage) but it will not earn interest while it sits there.

kmith said:I've got some basic questions too.
For a number of years, I've owned 90-day T-bills through Treasury Direct (now Legacy TD).
I've let them roll over automatically and considered this my "rainy day" fund (six months expenses).
I've never tracked the interest rate because my non-competitive bid gets the best deal available.

This thread advocates a much more active form of T-bill investment.
Am I missing out on something good? If I don't like the T Bill rate my only alternative is HSBC and the like. Right?

I would say "active" only in the sense of perhaps following the current rates and rate history, and trying to predict where the T bill rate go in the future, as opposed to a "dollar cost averaging" approach of dumping money into it regularly. I wouldn't go so far as to advocate buying/selling them in the market for a profit, rather to hold them to maturity and pocket the yield.

The inverted yield curve puts the T-bills at a unique position right now of giving a higher yield than many longer-term bonds. It might be attractive as a one-time 6 month investment to savings account rate chasers with no prior experience with Treasuries, and perhaps no future intention to invest in them should T-bill yields drop again significantly. For them it would be important to find out when we'll reach the peak of the yields (like the bottom of the market) so it pays off for them to switch from savings account rate chasing to this. In particular those who live in states with an income tax see big rate advantages with T-bills right now.

Some of your low to no risk alternatives to T bills might include:
High yield savings
Short term CDs
Savings bonds
TIPS

I would agree that for less than 6 months you're probably stuck with savings accounts and 4 and 13 week T bills as the most viable options. I would assume your rainy day fund is a minor share of your investments so maybe a rate difference might not be worth losing sleep over. In my case, I'm so risk averse that I put my entire net worth in fairly liquid investments with guaranteed principal, so a half percent up and down might mean $1000 a year difference. For my 6 month expenses I'm so paranoid that HSBC wasn't good enough because of the 3-day ACH transfer, so I also openend their checking account to have immediate access to the funds.