4-Week T-Bill Ladder Complete
I now have 4 consecutive 4-week Treasury Bills as a ladder, so next week one will mature and I will buy another 4-week T-Bill the same day with the proceeds. I’ll keep this rotating money as my emergency fund until the rates are non-competitive. For now, I’m averaging the equivalent of a 4.5% bank APY with only slightly less liquidity.
(For the history on me building this T-Bill ladder, please read the entries in my Treasury Bills Category)
Find more in Treasury Bills and Bonds | 12/1/05, 5:46am | Trackback
December 1st, 2005 at 7:46 am
hmmmm….very interesting, maybe I should review my asset allocation again and put some of my emergency money to bonds…on a different note did you create a javascript page to track your current and future goals?
December 1st, 2005 at 11:15 am
Now the question is, can you completely automate the ladder or not? Given you don’t mind the proceeds lingering in the C of I and given you want to continue reinvesting matured funds, can you avoid logging on the TD web site every week and managing your account manually?
December 1st, 2005 at 1:14 pm
correct me if I’m wrong, but I thought you could deposit the resulting funds back into your banking account?
December 1st, 2005 at 1:32 pm
Vlad,
If you don’t mind the small amounts lingering in C of I, then yes it can be fully automated. Just select the repeating investment option and the appropriate time interval and then set both the source and destination as C of I. I’ve got mine scheduled to automatically reinvest through April, actually, so technically I guess I don’t have to look at T.D.’s website again until then.
I don’t think T.D. lets you scheudle C of I transactions before the money’s already in there. This would be nice, as it would allow you to schedule a sweep of the small amounts collecting in your C of I to your checking account without having to log on. But maybe there will be a repeating option for C of I too? I won’t really know until I get some money in there. If anyone reading this had already scheduled to redeem C of I, maybe they’ll post with info?
A couple other possibilities to avoid having to log on to grab the small amounts of interest leftover after reinvesting:
1. Use an interest-bearing checking account in place of C of I, but maintain your purchase amount there (probably not preferable since the interest would be so low there, although I think Presidential’s checking had a good APY)
-or-
2. If you’re making less frequent reinvestments than every week, you could use a hi-yield savings account in place of the C of I. But you’d also have to watch the # of ACH transactions each month to stay below the limit of 6.
Personally, I think for weekly reinvestments I’m just going to leave the small amounts in the C of I until I get around to logging on. I have some less frequent transactions (like 6-mo T-bill every two months) that I’ve got scheduled to and from my Emigrant Direct account instead.
Good luck!
Dan
December 8th, 2005 at 7:10 am
I was just reviewing the recent Treasury Bill auction results and noticed a 7-day entry with a rate of 4.140%. Do you know if the 7-day T-Bill is new or something you can only get in the bank?
http://wwws.publicdebt.treas.gov/AI/OFBills
Neo
December 14th, 2005 at 7:55 am
Why not ladder the 182 day bills? They have the best rate of all and you could still ladder them effectively.
December 14th, 2005 at 9:28 am
6-month T-Bills give you less liquidity in return for higher returns. I wanted this to be my emergency fund, so I wanted maximum liquidity.
I am considering switching to 6-month T-Bills though due to the rate difference.
7-day T-Bills are offered at different times, according to their schedule. They not not offered every week like 4-week Bills.
December 19th, 2005 at 6:39 am
Or, you could just open a high-yield savings account and save yourself a lot of work. HSBC is currently 4.25%.
December 20th, 2005 at 5:25 pm
Rate on 4 week bill down to 3.553% this week 12/19) which is down from 3.630% which is down from 3.813% before that. Moved my maturing 4 weeks bills to 13 weeks this week. 91 day paying 3.988 this week. Up from 3.911 last week.