[HDRider]

4.3% right now is good for almost any investment class

 

[HDRider]

Especially for 3 months.

It is an annualized rate

 

[HDRider]

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.

 

[HDRider]

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.

 

[HDRider]

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?

 

[HDRider]

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

I bonds — TreasuryDirect

www.treasurydirect.gov

 

[HDRider]

If you want to invest more than 10k a year, look into TIPS. There is no limit on those.

That is what I bought via Fidelity

Announcements, Data & Results — TreasuryDirect

www.treasurydirect.gov