I’ve been using Treasury Direct for a few months now and it is a nice service. \u00a0Here’s a review of what it is:<\/p>\n
Treasury Direct is a government internet service that allows you to buy T-bills. \u00a0It is run by the Treasury. \u00a0You can buy other Treasury instruments with the service, however I’m sticking to T-bills. \u00a0The government account links to your bank account, so when you purchase a T-bill they use a service similar to “Bill Pay” to withdraw the money directly. \u00a0When you hit “Approve” on Treasury Direct, they withdraw the money; you don’t have to do anything else. \u00a0When the T-bill matures, they deposit the money back into your bank account. \u00a0There is also a reinvest option per transaction which I intend to use.<\/p>\n
What is a T-bill? \u00a0A T-bill is a relatively short term instrument that you purchase at a discount. \u00a0They are sold in $100 increments. \u00a0So if you buy (1) T-bill, Treasury Direct will withdraw say $95 dollars. \u00a0After maturity, they pay you $100. \u00a0The time periods available are 4 weeks, 13 weeks, 26 weeks, and 52 weeks.<\/p>\n
An important feature of T-bills is that they are safer than a bank account. \u00a0If T-bills ever go belly-up, we are living in an apocalypse and the banks have long ago blown up. \u00a0The only thing safer than a T-bill is gold. \u00a0(You should own a little gold and silver. \u00a0I like junk silver coins).<\/p>\n
T-bills pay more than a CD, and there is no commission if you use Treasury Direct. \u00a0T-bills are linked to Fed action since they are on the short end of the yield curve. \u00a0Theoretically this means 13 week and 26 week bills should have the most movement, and I’m laddering in to them. \u00a0Note, I don’t give investment advice, and if there is one area where I’m a novice, it is with interest rate investing, so do your own research.<\/p>\n
Currently 26 week T-bills are paying 1.07%. \u00a0I am currently building a “ladder” which means purchasing a few each month, then adding to that “tranche” when they mature. \u00a0Doing this over time your account grows. \u00a0A nice feature of this is that if an emergency comes up you will have a certain tranche mature that month and you can use the money for the emergency.<\/p>\n
Here’s a link to current interest rates: \u00a0Current Interest Rate Link<\/a><\/p>\n