Ask Terry Questions What to put money into — CDs or Treasury Bills

What to put money into — CDs or Treasury Bills

By Terry Savage on March 29, 2019 |

Is a treasury bill like a CD in that it is a set rate for a specific amount of time?

Terry Says

Yes, that is exactly how it works.  BUT you don’t know the rate before you invest in a Treasury bill.  It will likely be relatively close to the previous week’s rate. But the rate is set at an auction on Monday — and the auction participants are the big banks and dealer banks.  You agree to accept the average rate set at the auction.  The rate is fixed for 3 months, 6 months, or a year.  The you can have the T-bills automatically rolled over at the then-current rate.  Please read my column on How to Buy Treasury Bills.

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