Traders,

Rising interest rates have increased the rate of return on cash. But only if you know where to look. If you have cash in your brokerage account, you’re probably not earning much. Instead of leaving it to accrue whatever little interest your broker is willing to give, consider pushing your cash into an ETF that tracks Treasury bills, such as the Bloomberg 1-3 Month T-Bill ETF (BIL).

That way, you’ll get closer to the risk-free rate that’s available to those buying Treasury bills directly. BIL owns a basket of treasuries that mature over 1 to 3 months. As with buying T-bills directly, there’s virtually zero risk to your principal. Indeed, the only fluctuation you’ll see in your position value is the monthly rise and fall of the dividend being priced in. As rates rise, the dividend yield of BIL should increase closer to what’s available in newly issued T-bills.

Currently, BIL boasts a yield of 2.04%. It pays a monthly dividend of 15.53 cents, but it’s been increasing each month as old, lower-yielding treasuries mature and new, higher-yielding treasuries are bought.

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Video of the Day: Frank’s Charts – Hot Potential Swing Trading Picks

Watch this clip with Coaches Frank and Matt where they share a few charts and discuss potential Swing Trading Picks $HOOD $W $OSH $WWE $DINO $SQ

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Chart of the Day: Bloomberg 1-3 Month T-Bill ETF ($BIL)

Note how the monthly rise and fall has increased since July. This is due to the dividend yield increasing as bond yields rise. Higher yields = bigger dividends.

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