I think it was pretty cool we predicted the new I-Bond rate two-weeks ahead of time, and let everyone make some educated decisions on when to buy. I’m now interested in Treasury Bills. Today, the new rate for the 4-week T-Bill is 3.788%. After using our tax-advantaged conversion formula and using a 25% federal tax rate and 9% local tax rate, this works out to the equivalent of a bank rate of 4.30%. Not bad at all.
Too bad I can’t guarantee myself that rate. Apparently, you can’t figure out the exact rates ahead of time, as they are sold in an auction format. And if you buy them through TreasuryDirect.gov, you don’t actually participate in the auction, you just agree to buy them at the decided price. On the plus side, you pay no commissions. The next auction is November 8th. Since tomorrow the Fed is expected to raise rates again, I just put in a order to buy a $1,000 4-week T-Bill to see how it works out.
By Jonathan Ping | Investing | 11/1/05, 11:29pm