Consider US Treasury Bills, Notes and Bonds

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I have noticed US Treasuries are beating CDs if you get the ones with maturities greater than 1 year. Look here to see the rates. Click on “View the Daily Treasury Par Yield Curve Rates”. However you have to hold them to maturity to get that rate, because if rates go up more, the value of the bond will go down, and if you panic and sell it, you could lock in a capital loss. But no problem if you hold to maturity. US treasuries are as safe or safer from default than bank or credit union deposits.

Example: Ally 3 year CD 2.00%. US Treasury 3 year 2.79% as of 5/13/22.

You do not pay State or Local income taxes on US Treasury income ! Hello NY, NJ, California, Illinois, Massachusetts!

How to buy? I have always bought mine through a discount broker, like Fidelity or Schwab. The online tool for buying is suited for people who have knowledge about bonds; it’s not beginner friendly. Ask an online rep to walk you through it and take notes. Search on YouTube “buy treasury bonds fidelity” or “buy treasury bonds schwab” there is training out there.

You can also buy through TreasuryDirect.gov, but that site does not offer IRAs only a taxable account. At a discount broker, US treasuries can be in a taxable account, traditional IRA, Roth IRA, or HSA (Fidelity). TreasuryDirect also has a really confusing user interface, so it avoid if possible.

The 3 month US Treasury Bill is now at 1.03%, which beats T-Mobile Money Savings 1.00%. The T-Bill will keep going up as the Federal Reserve raises interest rates. I will move most of my money out of T-Mobile Money soon and push it into 3 month T-Bills held at Fidelity Cash Management.

Ally is raising online savings to 0.60%.

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The Treasury Direct website is a bit clunky you have to learn it. Once you do, it’s easy to navigate.
Remember that some people in congress have cut funding to many departments and then complain when the service/interface is antiquated or inadequate. While I understand and appreciate fiscal responsibility, I don’t think it’s fiscally responsible to defund things to the point where they don’t function well or are antiquated.

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The only reason to use TD is for I-Bonds. At Fidelity and Schwab you can buy new-issue Treasuries without ANY commission… same price as TD. At TD you can’t put bills, bonds, or notes inside of an IRA or HSA, only taxable accounts. Good luck getting customer service if you have a problem. With Schwab and Fidelity I get help within minutes.

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As of today the Fidelity app on my phone lists “Bond & CD Yields” > “Treasury Bonds” > 9 MO of 4.07%. Does that mean I should be able to purchase a 9 month treasury through them yielding 4.07%? Or is it more complicated than that? Your post lists much lower rates but is also four months old. What are the commissions? I think the only bond I purchased through them was a muni bond I did as a test many years ago.

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Call Fidelity. Bond trading is on the website I’m not even sure you can do it on the phone app. Yes, Treasuries are up past 4% now.

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