One bad thing about purchasing Treasury Bills at TreasuryDirect is that you don’t know the exact return of the T-Bill before you buy it. An interesting idea around this was presented by commenter Dan when I first posted about buying T-Bills:
You don’t have to commit until you know the price. 1. Schedule the transaction. 2. The auction will be on Monday for 3- or 6- month T-bills and Tuesday for 1-month T-Bills. 3. On Wednesday, look at your pending transactions. … At the bottom of the page, you have two button options. … “Delete” (which I assume means cancel the transaction, though I haven’t done it myself).
In other words, they seem to offer you the option to cancel the purchase after the rate announcement, possibly giving you the ability to see the rate before committing to the purchase. Nobody else seemed to have actually tried it, so I volunteered as the guinea pig. I scheduled two $1,000 4-Week T-Bill purchases for the the 11/22 auction date today (11/25 issue date).
And? Good idea, but no dice. I tried to cancel the transaction at noon today soon after the rate announcement, and it gave me the following error even though the Delete button was available:
We are unable to delete this transaction, because it is currently being processed.
So now we know – and it looks like I’ll be buying $2,000 of T-Bills this week. No big deal – the rate dropped a bit to 3.940%, but that’s still 4.48% equivalent return for me. I’ll also get to verify if you can fund your purchase directly from Emigrant Direct, but I think someone else already did that successfully.
By Jonathan Ping | Treasury Bills and Bonds | 11/22/05, 9:20pm