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4.3% right now is good for almost any investment class
 
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I thought I would look at this deeper.

I bought 4 month bonds. They cost $19,723.15 and I will get $20,000 on 03/21/2023. That comes to 4.22% per year.
 

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SM Entrepreneuraholic
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Discussion Starter · #9 ·
For anyone that has never bought t-bills before, they are actioned off, so you don't know exactly what the interest rate will be until the auction takes place and you have already placed your order. Big investors bid a price they are willing to pay for the t-bills and that sets the price for everyone else.

I believe there is a treasury website that posts the most current rates, but I think it is the rate from the last auction. What you will actually get is usually fairly close to the previous auction rate.

It is also much easier to place the order through a broker than through the Treasury website.

If anyone needs help, I can point you to a youtube video that explains everything and walks you through placing an order.
 

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For anyone that has never bought t-bills before, they are actioned off, so you don't know exactly what the interest rate will be until the auction takes place and you have already placed your order. Big investors bid a price they are willing to pay for the t-bills and that sets the price for everyone else.

I believe there is a treasury website that posts the most current rates, but I think it is the rate from the last auction. What you will actually get is usually fairly close to the previous auction rate.

It is also much easier to place the order through a broker than through the Treasury website.

If anyone needs help, I can point you to a youtube video that explains everything and walks you through placing an order.
You can also buy them in the secondary market with known yields. Generally, short term T-bills have a pretty predictable auction rate.

If you open an account at Home — TreasuryDirect links to your bank account, you can buy savings bonds, t-bills, t-notes, t-bonds, tips, etc. free of commission. Also, they will deposit the interest directly into your bank account and the principal when you security matures.
 

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You can also buy them in the secondary market with known yields. Generally, short term T-bills have a pretty predictable auction rate.

If you open an account at Home — TreasuryDirect links to your bank account, you can buy savings bonds, t-bills, t-notes, t-bonds, tips, etc. free of commission. Also, they will deposit the interest directly into your bank account and the principal when you security matures.
I used Fidelity.

I paid a discounted price of $986.16, knowing the value of the bond is $1,000 at maturity. The discounted price fluctuates. It closed yesterday at $986.09. The current and fluctuating price has no bearing on me unless I sell before the maturity. My $986.16 bond magically converts to $1,000 in cash at maturity (03/21/2023)

Buying bonds is the closest thing to a "sure thing" that exists

I had never bought a raw bond before. I always bought them in a mutual fund.
 

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I used Fidelity.

I paid a discounted price of $986.16, knowing the value of the bond is $1,000 at maturity. The discounted price fluctuates. It closed yesterday at $986.09. The current and fluctuating price has no bearing on me unless I sell before the maturity. My $986.16 bond magically converts to $1,000 in cash at maturity (03/21/2023)

Buying bonds is the closest thing to a "sure thing" that exists

I had never bought a raw bond before. I always bought them in a mutual fund.
Unless the issuer defaults, you can't lose your principal buying individual bonds. You can certainly lose principal if you invest in bond mutual funds, plus there are the fees charged on mutual funds that aren't buying individual bonds directly.

Off to eat too much, everyone have a blessed and Happy Thanksgiving!!
 

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I like Ibonds. My current 6 month rate is 9.62% and my next 6 month rate is 6.89%. You have to hang on to them a year. Between years 1 and 5 you pay a 3 month interest penalty but that still gives you a much better yield than savings accounts, high yield checking, CDs, etc.
 

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Discussion Starter · #14 ·
I like Ibonds. My current 6 month rate is 9.62% and my next 6 month rate is 6.89%. You have to hang on to them a year. Between years 1 and 5 you pay a 3 month interest penalty but that still gives you a much better yield than savings accounts, high yield checking, CDs, etc.
The problem for some is it is limited to $10k per year per person and you have to purchase through Treasury Direct which can have its own challenges.
 

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Discussion Starter · #15 ·
This video shows how to buy through Fidelity or Treasury Direct. She also has videos for using other brokers and is a great explainer with many videos that might be of interest.

 

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I like Ibonds. My current 6 month rate is 9.62% and my next 6 month rate is 6.89%. You have to hang on to them a year. Between years 1 and 5 you pay a 3 month interest penalty but that still gives you a much better yield than savings accounts, high yield checking, CDs, etc.
What kind of bonds are you buying?
 

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What kind of bonds are you buying?
Ibonds.They are like EE bonds except the interest rate resets every 6 months. You can only buy them from treasurydirect.gov. You cannot redeem them the first yer. From years 1 through 5 there is a 3 month interest penalty if you redeem.. You are limited to buying a maximum of $10K per year.Once you get past that first year it's a way to hold cash (equivalent) and not get eaten up by inflation.
 

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Ibonds.They are like EE bonds except the interest rate resets every 6 months. You can only buy them from treasurydirect.gov. You cannot redeem them the first yer. From years 1 through 5 there is a 3 month interest penalty if you redeem.. You are limited to buying a maximum of $10K per year.Once you get past that first year it's a way to hold cash (equivalent) and not get eaten up by inflation.
OK. I looked them up. The $10K limit is a deal breaker

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OK. I looked them up. The $10K limit is a deal breaker

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I quit buying them in the early 2000's when they mucked with the potential rates. The ones that I bought in 2000 are yielding over 10% right now.

They are still a reasonable deal for small investments. If you want to invest more than 10k a year, look into TIPS. There is no limit on those.
 
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