T-Bill Ladder Halfway Done, Treasury Auction Results Out

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Thanks to reader Brent who reminded me that the new Treasury Bill auction results are out today. The 4-week, 13-week, and 26-week are paying 3.997%, 4.004%, and 4.345% respectively. This bodes very well for the 4-week T-Bill ladder I am currently building. Last week I bought a $1,000 4-week T-Bill at 3.885%, this week I’m getting another one at 3.997%, which is the equivalent bank rate of 4.54% for my tax situation. I’m going to be setting up a 4-week auto-renewing ladder at TreasuryDirect once I have 4 of these bought. That way they’ll just cycle through each other, renewing automatically at maturity, and I won’t have a thing to do but watch the interest pile up (and faster than at Emigrent Direct). More later.

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Comments

  1. Can you do a projection visually/graphically of the earning potential with this ladder you’re starting? I’m just interested to see what the change is like after maybe 6 months, year, etc.

  2. Hey Jonathan,
    Did you try cancelling one of your purchase? I remember you said you bought 2 and try to do what a reader Dan suggested.
    Thanks.

  3. Once the bill matures and is deposited into your C of I and the new bill is bought with these funds, what happens to the amount in the C of I that is in excess of the cost of the new bill?

    For example, say that my $1000 bill matured, so $1000 goes into C of I. Then, I assume the next bill is purchased at say $997 since TD says I can only purchase in $1000 increments, but what about the $3 left over? Does it sit there until I initiate a transfer to my bank account?

  4. Micah – That will be hard, since I don’t know what the rates will be in the future. But I’m beating Emigrant by about 0.4%, though I need some more (free) money to make that spread worthwhile 😉

    Chris – Doh! Forgot. Thanks for reminding me. I’ll schedule that right now.

    Aaron – I think so. It just sits there not earning interest until you transfer it back into something that does earn interest. We’ll miss out on some compounding action, but not too much to make it not worth it.

  5. Are you linking your Emigrant account to your Treasury Account or do they not let you do that?

  6. I also would like to know if it is possible to fund Treasury Account directly with Emigrant-Direct.

  7. I haven’t tried, I only link my Presidential checking account. Remember, Emigrant Direct is a savings account, so you can only do 6 outgoing transfers a month by law. But, I’ll add it just to see, I don’t see why it won’t work.

  8. Ok, just did it. You can specifically choose ‘Savings’ or ‘Checking’ account. I just put in ‘Emigrant Savings Bank’ and the routing/account numbers, and I was done. I’ll need to buy something to make super-duper-sure it works, but if I can initiate a tranfser from ED->ING from ING’s side, this should be no problem.

  9. Micah,

    Like Jonathan said, can’t predict what the future rates will be. But Bankrate lets you look at past rates. Here’s last six months of 3-month T-Bill rates:
    http://www.bankrate.com/brm/graphs/graph_trend.asp?tf=180&ct=Line&prods=999914&gs=480,420&st=zz&c3d=False&web=brm&cc=1

    I didn’t see 1-month as an option for graphic, but maybe I missed it, or maybe someone knows of a site other than Bankrate with this type of graphic capability?

  10. Also, Jonathan, I’m curious – did your experiment verify that the “Delete” button for pending T-Bill transactions works on Wednesday?

  11. J.R. Connor says

    Please tell me how to get T-bills 2007 buying schedule. Thank you.

  12. Dan Isaacs says

    Jonathon, a good idea for a new post may be to update whether or not you are still doing this TD ladder stuff. Rates don’t seem to be competitive with my Money Market right now. (July 08). You just taking the interest from the savings account, or doing anything else with your cash?

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