Options Theory: How to Buy T-Bills via Treasury Direct
October 13, 2022
Today’s video shows how to buy Treasury Bills from the Government via Treasury Direct.
- T-bill: Par value is $100
- Buy for $99.80
- Bank account is debited $99.80 at the auction
- When bill matures, your bank account is credited $100.
- 20 cents was the interest. Annualize that, it should be around 3.5%
- High yield savings account: 2.25% – Immediate liquidity
- Buy 3-month T-bill for 3.5% – Illiquid for 3 months.
- Don’t put all your money in a 3-month T-bill all at once.
- Every week put in 1/12th of the money and then by the 12th week, you’ve bought 12 different T-bills that expire every week from here on out. Every week 1/12th of your money becomes liquid: LADDERING into T-bills
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