Coronator t1_iuhnn17 wrote on October 31, 2022 at 12:29 PM

High yield savings accounts and CD’s suck right now compared to just buying treasury bills. Banks are just taking your money at 2.5% or 3%, and buying T Bills paying 4%+.

Cut out the middle man - just buy treasury bills yourself.

dust4ngel t1_iuim586 wrote on October 31, 2022 at 4:42 PM

question - is this just true of the present moment or is this generally true?

Coronator t1_iuin6kt wrote on October 31, 2022 at 4:49 PM

True at the present moment. It’s definitely a bit whacky right now - CD’s have traditionally been a bit better than corresponding treasury bills. The spread will probably diminish, but for right now putting money on treasuries is absolutely the best play. Treasuries are state and local tax exempt as well, as opposed to bank interest.

StrayDog__ t1_iuiv2cz wrote on October 31, 2022 at 5:41 PM

This.

I've loaded a bunch of my savings into IBonds last year and this year. 7-9% interest rates during that time.

Obviously, not the same as HY savings account where you can pull the money out for whatever at any time, and still different from a CD where it is locked up for however long since IBonds have a penalty of losing 3 months interest on any funds you withdraw before 5 years. But, if you don't need that kind of liquidity (if you are looking at CDs, you probably don't) and you can keep the bonds for more than a year before cashing out, even now as the IBonds interest rate is going down, you probably would come out ahead of the current 2-3% rates on CDs.