[CoachKandSportsguy]

Here are the the latest interest rates for treasury bills on the secondary market with the yield to maturity.
There is zero risk for these bills, unlike CDs. So not sure why one would go with CDs where treasury bills are guaranteed principle and interest, unless there was a significant difference in rates. . just eliminate the individual bank risk. ..

The sweet spot is currently at 26 weeks, however, you can sacrifice a bit of interest and go out up to 52 weeks without losing much.

Resource Center | U.S. Department of the Treasury

Daily Treasury Bill Rates: These rates are the daily secondary market quotations on the most recently auctioned Treasury Bills for each maturity tranche (4-week, 8-week, 13-week, 17-week, 26-week, and 52-week) for which Treasury currently issues new bills. Market quotations are obtained at approximately 3:30 PM each business day by the Federal Reserve Bank of New York. The Bank Discount rate is the rate at which a bill is quoted in the secondary market and is based on the par value, amount of the discount and a 360-day year. The Coupon Equivalent, also called the Bond Equivalent, or the Investment Yield, is the bill's yield based on the purchase price, discount, and a 365- or 366-day year. The Coupon Equivalent can be used to compare the yield on a discount bill to the yield on a nominal coupon security that pays semiannual interest with the same maturity date.

[manaboutown]

"Imputed interest is important for discount bonds, such as zero-coupon bonds and other securities sold below face value and mature at par. The IRS uses an accretive method when calculating the imputed interest on Treasury bonds and has applicable federal rates that set a minimum interest rate in relation to imputed interest and original issue discount rules."

From: Imputed Interest: What is is, How to Calculate, FAQs.

[Brwne]

Originally Posted by Boomer

I don’t think this is over.

Looks to me like when Congress voted in 2018 to soften bank regulations, they sent the fox to guard the chicken house.

Can someone here explain how things work when the FDIC insurance has to kick in? Could it become a convoluted mess that takes a long time to get your money back? I hope someone can enlighten me…..just in case.

(I understand the insured limits — for regular people. But those who ignored the limits willy-nilly are still getting paid by the FDIC. I know that decision was based on the potential for long range fallout because there was seriously big money on deposit for running businesses, and I guess there were certain banks that could supposedly handle those kinds of deposits. But how long can that kind of thing continue if the FDIC decides to pay out more to the technically uninsured?)

These sure are some weird, weird financial times.

Boomer

Banks pay an insurance % on ALL deposits to the FDIC. When interest rates were virtually zero, banks lost money on deposits. The FDIC insurance is based on a bank and the account's tax id or Social Security numbers - not account names. The insurance covers the principal balance only.

There are companies that provide FDIC insured accounts "automatically" by spreading
those deposits amount a large group of banks. You deposit $1m and get a CD from your bank and CD's from 3 other banks. All 4, totaling $1m, are FDIC insured. Simultaneously, your bank gets a deposit from each of the 3 other banks and, hence, still has an effective benefit of your $1m deposit.

The current bank problems stem from hyper inflation causing the FED to increase interest rates quickly. The safe haven for banks, historically, had been T-bills for cash investments - good faith and credit of the US Government - held to maturity, they don't lose value. As interest rates rise, the market value of the T-bills decreases to create a current market yield. Not a problem unless the bank needs liquidity to cover account withdrawals and must sell their T-bills in the current market.

[Bay Kid]

Originally Posted by ChrisTee

+1 and TIPS. Yesterday, Treasuries were paying a higher rate than FDIC CDs of similar terms. Easy to buy on Treasury Direct via Manaboutown's link above. Fidelity, Vanguard and Schwab are also easy places to buy Treasuries and then you can very easily sell or buy them if needed on the secondary market. Easy to create a CD or bond ladder on any of those last 3 sites.

Good luck - it's a golden period for cash investors right now, and TIPS may offer you additional piece of mind with their inflation protection as you are right - strange financial times. Are we sure that inflation is truly tamed? Not I, and TIPS may be helpful inflation protection for some here.

I lost a lot of money with TIPS. Staying away from govern