Ask Terry Questions T Bills vs. high yield savings accounts

T Bills vs. high yield savings accounts

By Terry Savage on November 04, 2023 | Chicken Money

Should I continue to buy T Bills or should I take $5000.00 and put it in a high yield savings at Western Alliance Bank….Capital one savings, etc?? I do not have a significant amount of savings but would like to start earning some interest with about $15,000 that I have just sitting in a saving account earning 0 or mostly 0 savings at Bank of America. Thanks Terry…Love listening to you on WGN each week. I did put about $2000 in T Bills as per your advice but its a bit confusing and you only get the interest when you buy and then the money just sits there?! Am I correct about that??

Terry Says

You get the interest UP FRONT when you buy T-bills, and then again when you automatically renew them. And you don’t pay state income tax on the interest!
Now that you have a TreasuryDirect account, I recommend continuing to buy T-bills. Be sure to specify automatic renewals at maturity, unless you know you’re going to need the cash. You can always change your mind about a renewal if you do so online in your account at least a few days before maturity. Just look up the T-bills in “holdings” and change the renewal to zero renewals.

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