Dan, RE: T-Bills
Are U.S. treasury bills a better investment than just putting your money into a bank CD yielding 5%-6%?
Almost always. The yield of a T-Bill is usually higher than an equivalent maturity CD. In addition, the interest on a T-Bill is only taxable on a federal basis, not a state or local basis.
How do you know what return on your money you are getting with them?
When you buy a T-Bill, it has a yield to maturity just like a CD would.
Can you pull your money out easily once you've bought them?
You can sell a T-Bill on the open market at any time, but if you do sell before maturity, you have to take the market price, and you could have a capital gain or loss.
And how can you buy them?
If you live in a US city with a Federal Reserve Bank, you can go there. Alternatively, you can also buy them by mail from the Fed, and I think that you can buy them on-line now, too, but I'm not sure. If you don't mind paying a minimal commission, a brokerage firm can buy them also. Minimum lot is $10,000, I believe. |
