Savings/investments/bonds Master Thread.

[ExGingi]

I believe those are exempt from federal and state. Would be interested in seeing the yields.

Fwiu there are high yield mm options that are federally tax free.

FMQXX current 7-day yield 3.71%
VMSXX current 7-day yield 3.6267%

[Yo ssi]

Rate cut to 4.35%. Classic bait and switch!!!
T-bills currently outshine anything out there.

Still waiting on my account.

You were one of the first - and you deserve the best.

Thanks for being one of the first customers to apply for our Primis Premium Checking account. We know that your account is still pending and we’re glad you’re here. Once your account is finalized, you’ll be earning the top-notch annual percentage yield (APY) of 5.03%.

Soon, you may see on our website that our APY is changing to 4.35%. This will not apply to you. As an early adopter of our digital platform, once your account is finalized, the APY on your account will be 5.03%. While our rates are always subject to change, we want to currently hold your rate at the highest level possible.

Note, depending on the timing of your application and when it opens, the initial welcome email that you receive from us may state the rate of 4.35% APY. Rest assured, we will adjust your rate accordingly to 5.03% APY. Exceptions to this only occur when the account opening process is terminated by you or stalled for 45 days. Congratulations on being a banking trailblazer. Our goal is to continue to impress you and create a long-standing relationship.

Thank you,
Your Primis Team

Can you give a dumbed down version of how T-bills work?

[CountValentine]

Can you give a dumbed down version of how T-bills work?

That is the only version I know.
I use Fidelity to buy them.
They have auctions every week for 4, 8, 13 and 26-week T-bills. Less often for 17 and 52 week ones.
https://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf
For Fidelity my order needs to be placed by 9:00am CDT the day of the auction.
They are purchased in 1k increments. If you want to buy 10k you purchase 10.
You get the auction price which you don't know ahead of time. I watch Fidelity's secondary market which is a good indicator of the price (yield) I will receive.

This probably only makes sense to me so ask away. 

[Dan]

That is the only version I know.
I use Fidelity to buy them.
They have auctions every week for 4, 8, 13 and 26-week T-bills. Less often for 17 and 52 week ones.
https://home.treasury.gov/system/files/221/Tentative-Auction-Schedule.pdf
For Fidelity my order needs to be placed by 9:00am CDT the day of the auction.
They are purchased in 1k increments. If you want to buy 10k you purchase 10.
You get the auction price which you don't know ahead of time. I watch Fidelity's secondary market which is a good indicator of the price (yield) I will receive.

This probably only makes sense to me so ask away. 

Why buy direct vs secondary?
What are the fees/losses to sell when interest rates go up?

[Yo ssi]

What's the difference in security types?
What's the advantage over a typical CD?
Is money locked in? (is that dependent on the week bill amount?)

[CountValentine]

Why buy direct vs secondary?
What are the fees/losses to sell when interest rates go up?

Direct gets a little better rate.
No fees to buy or sell. Losses/gains will be based on rates going up/down. I let all mine (13/26 week) mature so what I see is what I get.

What's the difference in security types?
What's the advantage over a typical CD?
Is money locked in? (is that dependent on the week bill amount?)

1 - Not sure I follow the first question. T-bills are a year or less and T-bonds more than a year. Monday I bought a 26 week T-bill. That means in matures in 26 weeks. I either cash it out or roll it over into another 26 week T-bill
2 - T-bills can be sold prior to maturity with less on a penalty it seems but I never sold one. Rates on T-bills are a little higher right now.
3 - They can be sold at any time. Interest rates will determine the price.

There has to be others buying T-bills. Feel free to jump in. 

[Dan]

You buy a 26 week Tbill at 4.8% for $1,000.
It goes up to 5.5% after 13 weeks. What do you get for liquidating your position at that point?

[CountValentine]

You buy a 26 week Tbill at 4.8% for $1,000.
It goes up to 5.5% after 13 weeks. What do you get for liquidating your position at that point?

When you buy it will be discounted to reflect the full value at maturity.
26 week I bought Monday cost me 975.53 per 1k. I will receive 1k at maturity for each one. That comes out to 5.03%.
Interest rates do not matter when you hold to maturity. Lokk at it as a fixed rate when held to maturity.

[Yo ssi]

When you buy it will be discounted to reflect the full value at maturity.
26 week I bought Monday cost me 975.53 per 1k. I will receive 1k at maturity for each one. That comes out to 5.03%.
Interest rates do not matter when you hold to maturity. Lokk at it as a fixed rate when held to maturity.

You lost me.
If I buy now I pay $975 so I'm locking in the current interest rates?

[CountValentine]

Houston, we have a problem!!! 
It looks like I am wrong about selling in the secondary market before maturity. I just tried to sell a T-bill. The problem is when selling there is a minimum. For the T-bill I was going to sell it was 50 so 50k. Others I tried were even higher. Sorry about the wrong info as I hold all mine to maturity.

[CountValentine]

You lost me.
If I buy now I pay $975 so I'm locking in the current interest rates?

If you bought on Monday like I did you would have paid $975 for a 1k T-bill. When it matures in 26 weeks you receive 1k no matter what interest rates do. That is an annual yield of 5.03%.

[Yo ssi]

If you bought on Monday like I did you would have paid $975 for a 1k T-bill. When it matures in 26 weeks you receive 1k no matter what interest rates do. That is an annual yield of 5.03%.

How can I determine the next rate?
I'm not understanding the benefit over a CD, is it a better rate?

[CountValentine]

How can I determine the next rate?
I'm not understanding the benefit over a CD, is it a better rate?

You need to watch the secondary market. Here it is for Fidelity. T-bills have been pricing .05-.10 higher at auction. So, if the auction was today (it is Tuesday because of the holiday) I would expect the yield to be 5.05 - 5.10 for the 6 month (26 week).

Now if a 6/mo CD is yielding more I will buy that instead.

[CountValentine]

The reason I like using a brokerage for T-bills/CD's is I don't have to shop around and open new accounts.

I was using CU's with having to make 15 debt card purchases a month per account to get the highest rate.

[yaakovely]

Rate cut to 4.35%. Classic bait and switch!!!
T-bills currently outshine anything out there.

You were one of the first - and you deserve the best.

Thanks for being one of the first customers to take advantage of our Primis Premium Checking. You’re earning the top-notch annual percentage yield (APY) of 5.03% and we’re glad you’re here.

Soon, you may see on our website that our APY is changing to 4.35%. This will not apply to you. As an early adopter of our digital platform, you will continue to earn 5.03% APY. While our rates are always subject to change, we want to currently hold your rate at the highest level possible.

Congratulations on being a banking trailblazer. Our goal is to continue to impress you and create a long-standing relationship.

Thank you,
Your Primis Team

[CountValentine]

You were one of the first - and you deserve the best.

Thanks for being one of the first customers to take advantage of our Primis Premium Checking. You’re earning the top-notch annual percentage yield (APY) of 5.03% and we’re glad you’re here.

Soon, you may see on our website that our APY is changing to 4.35%. This will not apply to you. As an early adopter of our digital platform, you will continue to earn 5.03% APY. While our rates are always subject to change, we want to currently hold your rate at the highest level possible.

Congratulations on being a banking trailblazer. Our goal is to continue to impress you and create a long-standing relationship.

Thank you,
Your Primis Team

Nice!!! I know some that deposited 7 figures. Hopefully they all get it.
I wonder for how long?

ETA:
https://www.doctorofcredit.com/primis-bank-5-03-checking-savings-accounts/
Update 2/17/23: They are now sending out an official email confirming that the 5.03% rate will remain (at this time) for those who got the account while that rate was being advertised.

[Spoon]

FMQXX current 7-day yield 3.71%
VMSXX current 7-day yield 3.6267%

VUSXX looks to be better and also exempt from state taxes.

VYFXX is lower but completely tax free (fed, state,city) which may be better for many in NY.

Still not as high as T bills but easier.

[sam2015]

There has to be others buying T-bills. Feel free to jump in. 

I see there has been a lot of confusion regarding the treasuries/t-bills, so I figured I will write a little to clear things up. I will be discussing buying from your brokerage account on the secondary market - which is a lot simpler than buying new issues.

Let’s start simple. The treasury rates right now range from (approximately) 4.60% for 1 week to around 5.00% for 1 year. This means you will earn 4.60-5.00 on your money when you purchase these treasuries.

These can be bought in $1000 increments.

This does not mean you are ‘locking’ away your money.

Assuming interest rates stay the same: You can sell them and get back your money and earned interest for no fee. If you buy a 1 year treasury and sell it one week later, you will have earned (approximately) 4.55% on your money for that week. Not 5.00%. Complicated to explain, not for now.
You can sell them at $1000 increments. When you sell, the money will be available immediately.

This is way different than a CD, because the bank will give you a penalty for taking your money back before maturity. Depending on the term of your CD can be anywhere from 30 days of interest to 1 year of interest (on a 5 year cd).

If interest rates go up: This is quite complicated but in the example that @Dan gave where he would want to sell his treasury after 13 weeks and the rate is now 5.50. This means that the new 26 week is now 5.50. But you only have 13 weeks left, and the 13 week will not be 5.50. So you will only lose the difference from the rate you bought and the rate you have to sell at.

A more simple example: You bought a 1 year treasury at 5.00 for approximately $950. After 1 year you will get back $1000. If after one week you want to sell and the rate jumped to 5.25 (highly highly unlikely) you can sell your treasury and get back approximately $948.50 - you lost .25 on your money.

The amount you will lose when selling is the difference between the rate you bought it at and the rate you have to sell it at.

I will try to show some pictures when the market opens so you can see the difference between the bid and ask price.

[sam2015]

Houston, we have a problem!!! 
It looks like I am wrong about selling in the secondary market before maturity. I just tried to sell a T-bill. The problem is when selling there is a minimum. For the T-bill I was going to sell it was 50 so 50k. Others I tried were even higher. Sorry about the wrong info as I hold all mine to maturity.

This is incorrect. You can always sell in $1000 increments. Just might now get the top price, but it will be almost the same. Will post a screenshot when market opens.

[sam2015]

Regarding CDs, although you can buy something called a brokered CD, they are not so liquid and the difference between the bid and ask is quite a lot.