Answer by AlRacoon for Why would anyone buy U.S. Treasury Bills?
Another point to consider is taxes. Interest paid by the US Federal Government is exempt from State taxes and therefore has a overall better yield than an equivalent interest rate paid by the banks.
View ArticleAnswer by Evan Pallesen for Why would anyone buy U.S. Treasury Bills?
Having grown up and spent most of my adult life in New Zealand I personally find the US way of doing things somewhat confusing, while acknowledging that it is great if you are buying a home. I'm sure...
View ArticleAnswer by Paulo for Why would anyone buy U.S. Treasury Bills?
It makes sense to use them in a portfolio strategy. Think of a portfolio as a recipe, and t-bills are an ingredient. When you make a portfolio you are looking to maximize return at a certain level of...
View ArticleAnswer by SJuan76 for Why would anyone buy U.S. Treasury Bills?
Other answers explain why it would be interesting to buy Treasury Bills, I am going to explain the "discount" concept. The point here is the mechanism of how those TB are sold to the primary market...
View ArticleAnswer by Skroo for Why would anyone buy U.S. Treasury Bills?
The advantages of the discount auction become more apparent when you consider the number banks are dealing with. You might look at putting $10,000 in a 6 month T-bill, but a bank is going to be looking...
View ArticleAnswer by pjc50 for Why would anyone buy U.S. Treasury Bills?
For average individuals there isn't much point to this apart from the small interest. For large amounts of money, there is the problem that bank insurance only applies up to a certain dollar value -...
View ArticleAnswer by jf328 for Why would anyone buy U.S. Treasury Bills?
For the last few years, the interest rate of Japanese government bond is negative. That is, you give 100 to them, and they pay you back 99 in 5 years. The top concern other than earning interest is...
View ArticleAnswer by Allen for Why would anyone buy U.S. Treasury Bills?
Welcome Wapiti! Treasury Bills (T-bills) does seem like an oddball but it might work for some folks. I'm going to address it both your questions individually as interest and liquidity. 1) Interest...
View ArticleAnswer by Dale M for Why would anyone buy U.S. Treasury Bills?
No, what it says is “In half a year, we’ll give whoever holds this bond $10,000 for which you pay us $9,750 now”. This is equivalent to an annual interest rate of about 5% (the example is showing a...
View ArticleAnswer by quid for Why would anyone buy U.S. Treasury Bills?
That non-specific example illustrates about 5% annually; which is pretty good and about double the current actual market for a 6-month treasury. Treasuries are marketable securities so you can sell it...
View ArticleWhy would anyone buy U.S. Treasury Bills?
From the Treasury Direct website, I saw this Bills: U.S. Treasury Bills are a type of short-term security of one year or less, usually issued at a discount. The discount is the amount the security is...
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