MGK_1223

MGK_1223 t1_jae8x06 wrote

Reply to comment by rwaterbender in Question about bond rates by rwaterbender

Are you buying on Treasury Direct or on a brokerage? If TD and you have the discount rate, you can use the following formula with $100 as face value and 30 days as time: Price = Face value (1 – (discount rate x time)/360).

If through a brokerage, the price should be directly listed.

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MGK_1223 t1_jae7net wrote

Reply to Question about bond rates by rwaterbender

These are annualized. To find what you'd actually make, you can take the par value ($100), subtract the price you're paying for the T-Bill, and divide by the price you're paying. That'll get you the yield for the period between you buying the bill and the maturity date (30 days for yours).

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MGK_1223 t1_jae5o2b wrote

Reply to comment by _Nuba_ in How much should I put into CDs? by Rattingaroundd

You'd want to keep a portion in an emergency fund though. Size of that fund is up to you and based on your typical monthly expenses (general rule of thumb is emergency fund would last you ~3-6 months). Then can invest the rest.

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MGK_1223 t1_jae54ry wrote

Reply to comment by Rattingaroundd in How much should I put into CDs? by Rattingaroundd

An alternative to investing in CDs is investing in Treasury bills (can do through Treasury Direct or your brokerage account). Currently, the annualized yield for a Treasury bill is higher than the 5% you're seeing for a CD (the 6-month one is 5.11% on Schwab for example). And while interest on CDs is taxable at the federal and state level, interest on Treasury bills is exempt from state and local taxes. Could be advantageous if you live in a high income tax state.

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