What benefits does a Bank CD have over a treasury?

Discussion in 'Trading' started by David Donner, Dec 28, 2023.

  1. What benefits does a Bank CD have over a treasury?
     
  2. Robert Morse

    Robert Morse Sponsor

    If the same rate, none that I can think of unless you want all your money in one place and that is all they offer.

     

  3. What about if the holder dies? Would it be easier to get the CD cashed than a treasury?
     
    murray t turtle likes this.
  4. Robert Morse

    Robert Morse Sponsor

    A CD can have a beneficiary. A brokerage account can have a beneficiary. If bought at Treasury Direct, I assume they offer that too. So, it will make no difference. For me, T-bills are better. I live in NYS so no state tax on them. And they are marginable. CDs are not. T-bill can be sold in most cases. CD have a penalty for early Cash-in, unless you buy one that allows that without penalty, and those rates are lower.

     
    taowave likes this.
  5. wartrace

    wartrace

    I may be wrong but a treasury will increase in value IF rates decline whereas with a CD even if rates drop down to zero you will still get just the face value and interest.
     
  6. Robert Morse

    Robert Morse Sponsor

    T-Bills will change in value but always are worth the same at maturity.
     
    wartrace likes this.
  7. In general:
    https://www.terrysavage.com/t-bills-beat-cds-2/

    Additionally,
    Others have mentioned it in different ways but one of the key things with tbills is that there is an active and liquid secondary market. This is why people bother to talk about the value going up or down. In a CD you are not likely to be selling it to someone else.