How To Buy T-Bills Direct From the US Treasury | Andrew Brill
Jul 4, 2024
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Financial advisor Andrew Brill discusses the benefits of investing in U.S. Treasury Bills (T-Bills) as a secure way to protect capital with yields around 5%. He explains how to purchase T-Bills directly from the US Treasury, offering a safe place to get a 4 to 5% return on capital in turbulent market conditions.
Investing in T-Bills offers a secure option for individuals amidst market volatility with yields around 5%.
Buying T-Bills through Treasury Direct is accessible, involving straightforward account creation and auction participation.
Deep dives
Benefits of Investing in T-Bills
Investing in T-Bills offers a secure option for individuals who are concerned about market volatility. With T-Bills currently offering yields around 5%, they provide a relatively safe place to park capital while earning a decent return. Compared to traditional bank accounts with low yields, T-Bills present an attractive opportunity for those seeking better returns on their investments during uncertain financial times.
Purchasing T-Bills through Treasury Direct Website
The process of buying T-Bills through the Treasury Direct website is straightforward and accessible. By creating an account on Treasury Direct and participating in T-Bill auctions, individuals can purchase new issue T-Bills directly from the Treasury. The platform offers options to reinvest T-Bills automatically and provides detailed information on upcoming auction dates and yields, making it easier for investors to make informed decisions regarding their investments.
Understanding T-Bill Investments
Investing in T-Bills involves buying them at a discount and receiving the full principal amount upon maturity. The difference between the purchase price and the maturity value represents the yield on the investment. Additionally, gains from T-Bill investments are exempt from state and local taxes, making them a tax-efficient investment option. While selling T-Bills before maturity may require transferring them to a brokerage account, their short duration often allows investors to hold them until maturity to retrieve their full funds.
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Exploring the Benefits of Investing in U.S. Treasury Bills
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Here's a quick explainer video for you about how to buy very short-dated US Treasurys, known as T-bills, directly from the US Treasury using the TreasuryDirect website.
As you know if you’re a regular viewer on this channel,I’ve been making a lot of noise recently now that T-bills are offering yields around 5%.
That’s a very big development, as investors who are concerned about today’s financial markets now have somewhere safe to park their capital, keep it relatively liquid, AND get paid a decent return on it.
That hasn’t been the case for a long time.
1 year T-bill yields have been at record lows for much of the past decade, down near 0% for many years. The last time they were this high was 2006.
And with the inflation rate, as measured by CPI, falling – it may not be very long before T-bills offer a positive real return when adjusted for inflation. Again, that hasn’t been the case for a very long time.
I can’t tell you how many times I’ve had investors tell me “I’m too spooked by the turbulence of today’s uncertain markets. If I could just find a safe place to get a 4 to 5% return on my money for the time being, I’d be thrilled.”
Well, that’s now possible given where short term yields are.