Consider US Treasury Bills, Notes and Bonds

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%.