The problem with bond funds is that they have no end or maturity date. T-bills, or corporate CDs have an end date. T-bills are bought at a discount.. meaning you might pay 980, 990 or even 995 for a 1000 par value bill. At maturity..and I'm talking 3 month to one year bills, you receive the face value. New Issue CDs, are bought at par, and depending on the type pay interest and then return the face value upon maturity. CDs have a variety of "bond ratings".. investment grade is considered BBB or better. Most are FDIC insured. T-bills are backed by the US (no need for political jabs). Current CDs are running 3.3 for six month thru 4.2 for some one years. T-bills and soon to be maturing T-notes are yielding very close to that. You can create your own ladder or have a online brokerage take you thru it. Obviously, with one or two more 75 basis point hikes in the works, and assuming this is in lieu of cash, you might want to put more on the short term side.. or ladder 3, 6, 9 and 12 months. FWIW
|