Ask Terry Questions T-bill interest payments

T-bill interest payments

By Terry Savage on July 18, 2024 | Chicken Money

Terry,

One more question: Can you rollover T-bill interest payments to buy more T-bills? Similar to the way one would do dividend reinvestment to buy more stocks (DRIP.)

Terry Says

Read this:  T-Bills beat CDs – Terry Savage

When you purchase a T-bill, the interest is paid “up front” — That is, if you purchased a $1,000 T-bill, they only take $950, for example, out of your account. At maturity you get the entire $1,000 back, or if you roll it, only the interest drops back into your bank account.  If your bank account is a money market account, then you earn interest on the up-front interest.

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