- Did you have to pay a fee to “Get your money out” of the iBonds? - Start laddering your bonds in 10k or 25k increments. - I’ve been keeping my small cash in a Marcus savings account for the interest. Using it as a sweep account for coupon payments, paycheck direct deposit, and other stuff. Interest accrues daily and paid on the 1st of the month.
No fee! Only I owe tax on the interest. The system was good when the rates were very high, it was a no-brainer, only that rates fluctuate in a complex manner, and it is hard to talk to someone. But having your money locked up for a year is not worth it when even the money marker is decent enough, I have s small position in covered call etfs and I will increase them later this year. Laddering is not that interesting as I am not prone to lock up for more than, say, 6 months as the shorter, then better rates exist. December, the short bonds maybe at 5.75-6 percent.
This thread is over a year old, but I thought it might be fun to revisit it because Matt Levine wrote this in his column at Bloomberg today: Treasury Direct In principle, it makes a lot of sense for the government to be in the retail financial services business. The US government is the source of two important financial assets: The long-term safe assets, Treasury bonds, are liabilities of the Treasury, while the short-term risk-free information-insensitive assets, dollars, are liabilities of the Federal Reserve. And because the Fed issues the dollars, a lot of the US dollar payments infrastructure ultimately runs through the Fed. But you probably hold your dollars in an account with a bank, and you probably hold your Treasury bonds at a broker or custodian, and you probably make payments with a bank’s credit card. And every so often people suggest that the government should provide these services more directly, sometimes for risk reasons (your bank is more likely to fail than the Fed), but often for fairness reasons. Maybe if the government provided your bank account and let you send payments and invested your money for you, more people would have access to banking and payments and savings at lower and fairer prices than you get with a financial system driven by commercial concerns. There are fans of “postal banking,” in which the Post Office gives you a bank account, and I sometimes read proposals for “central bank digital currencies” in which the Fed would give you a bank account.3 The Wall Street Journal has a pretty convincing rebuttal however: People who want to move investments from their accounts on the Treasury Department’s website to their brokerage accounts may have to wait as long as a year. The website, TreasuryDirect, is dealing with a deluge of customer-service requests. The number of funded accounts on TreasuryDirect grew to more than four million last year, from 656,000 in 2019. Americans rushed to the website in recent years to buy inflation-adjusted savings bonds at yields nearing 10%. The resulting customer-service backlog is straining the Treasury Department’s antiquated system, which can require verified signatures and paper forms sent through the mail. People transferring securities from TreasuryDirect to third-party brokerages experience especially long waits because those requests are processed manually, according to people familiar with the matter. The government does actually provide some retail financial services directly: A lot of people hold Treasury bonds in a brokerage account, but you can go to the TreasuryDirect website, buy bonds directly from Treasury, and hold them in the Treasury’s own ledger. I actually do this, and if you don’t, I encourage you to check it out.4 For people my age, TreasuryDirect is a soothing relic of a simpler time on the internet. It is not, you know, a good website, but is is very much a website; everything about it screams “website.” There is no mobile app.5 For a long time you had to type in your password using a mouse and a “virtual keyboard,” an actually famous bit of bad user interface design that they eventually got rid of. Probably Treasury does a fine job of keeping the ledger of who owns bonds? Like I check my TreasuryDirect account periodically and it remembers me and has my bonds. But if you buy Treasury bonds on TreasuryDirect and then want to move them to your brokerage account, you have to, like, write a certified letter to your congressperson. It takes a year to move the electronic entry from Treasury’s ledger to your broker’s! Using paper forms! Meanwhile in the regular financial system, driven by commercial concerns, businesses are deploying AI chatbots to instantly answer your investment questions and doing instant settlement on the blockchain,6 because people want those things and commercial concerns drive companies to build them. Here's a link to the Bloomberg column: https://tinyurl.com/241010BBLevine And here's a link to the WSJ article that Levine cited: https://tinyurl.com/241009WSJ Both links are gift articles that do not require a subscription. The Bloomberg link expires in seven days.
wsj and matt should know better. treasurydirect is run by the bureau of the fiscal service, aka, goverment's fiscial agent. retail is never their customer. the rest of the treasury allocation is splited among 10 primary dealers. i don't know if you buy directly from treasury direct will get you the allotment first, but surely the price is the same.
The FED Don't issue dollars.. if that guy is writing this in Bloomberg, then Bloomberg is in trouble.