Can you check if JPM charges you for new issue Treasuries?
I ended up opening an account and they are telling me there is a fee to buy Treasuries.
Thanks.
Is this better than say opening a 6 month CD at fidelity for 3.85% (posted above) ? I get that I’m locked in for 6 months but not sure if I’m missing any fees that would be tacked on for either option.
I’ve never done a CD with Fidelity, so I don’t know the answer about fees.
As far as the products themselves are concerned, since rates are going up quickly I’d bet the actual yield on liquid savings currently at 3.5% would at least break even with a 6-month CD locked at 3.85% over the same term.
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Thanks for this.
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Reminder on these, especially at a new financial institution you aren’t familiar with:
- the advertised APY is for 12 months
- check their auto renewal rules: if the rate can drop at the term you may want it to cash out instead of automatically rolling over.
Some of the financial institutions are better at disclosing that than others.
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I was checking Fidelity’s CD rates earlier today, and they are now offering 4.25% for 6 months.
If you are in one of the higher income tax rate states remember to compare your after state tax return vs what you get from a similar term treasury.
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Fidelity just listed the expected yields for next week’s treasury auction. The expected yields are 3.965% for 3 months; 4.155% for 6 months; and 4.461% for 12 months. For me in California, these yields are better than the CD rates being offered when you factor in state income tax.
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i would absolutely not go in on a treasury until after the next FOMC meeting the first week of november when papa jerome is planning on hiking the interest rate once again.
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That’s absolutely right. CA, NY, NJ should definitely be looking into treasuries. @ilpapa the bond market is several steps ahead of everyone and the Fed’s next hike(s) are priced in. In the worst case you hold your treasuries till maturity and you get the yield you bought.
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i could not disagree more strongly. with 8+% inflation the bonds should be going for MUCH more money than they are now. the bond market is slow because no one sees the long term value in that proposition at the moment.
my larger point was why make long term investments when the landscape is likely to change a bit next week.
Not only the next 75 point hike is priced in but also a 50 point hike in December and probably one more next year. The only thing that could impact the rates is the messaging of the Fed. I stack my treasuries so I have something maturing every month. I love when someone on CNBC says the fed is raising the rates next month and mortgage rates will go up. But if you watched closely after the June 75 point hike mortgage rates went down 1% and started going up only after Powell’s Jackson Hole speech in August.
Are these just federally taxed? State taxed? Haven’t done any research into them yet.
Interest from Treasury bills/notes is subject to Federal income taxes but exempt from state/local income tax.
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Here’s your learning moment. 75 point hike and rates went down. Now it’s time to listen to the messaging from the Fed.
3 month up. once this settles and we’ll see some changes in the long term outlook after shit starts getting bad.
No personal experience, just a random encounter with an ad.
(Obviously the CDs are a pass)