4 week Tbills went off at 5.96% this week

Thanks for the update. I’ll take advantage of that fear premium.

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Our politicians are a bunch of self serving morons

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Our fellow voters are a bunch of self serving morons.

FIFY

Agree with Jag. Good opportunity to get an amazing rate. I’ll be buying tomorrow. Thanks for bringing this here.

Where are you seeing this rate? I called myself looking yesterday and saw the highest were 90 day t bills at 5.28%.

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ive never bought a Tbill so dumb question; this 5% is paid out at the end of the 4 weeks in my TreasuryDirect account?

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I bought my first T bills a couple weeks ago through Treasury Direct. That account is linked to your bank account. If you tell it to buy $10,000 in TBills, it withdraws the discounted amount that will with interest become $10,000 at the end of the term you choose. So say it sucks out $9,800 (making up a number) or so to buy the bills, then at the end of 4 weeks (or other term you selected) you have the option to have the $10k deposited to your bank account or reinvested in TBills for the same term as before.

I’m having the final amount returned to my account this first time, just to test the system. If all works well, and rates stay good, I’ll do more and tell it to reinvest (I think it will let you do that for up to 2 years).

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Will I pay the interest on taxes for this year because it matured? If I reinvest will it change that.

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I’m pretty sure you’ll pay taxes (fed only; exempt from state) for the year when interest is earned event you reinvest. A pro can tell us for sure, but you pay taxes on CD interest in the year earned even if the CD doesn’t mature for several years. I assume this would be the same.

The rate is the annualized rate. You buy the t-bills at the discount that yields the rate. The aforementioned bonds in the OP sold at .99545778 which means you would have paid $995.457778 for every $1000 in t-bills you bought. At the end of 4 weeks you would receive $1000.

There are 13 four week periods in a year. You would have gotten a $4.54 discount-interest--on your $995.46 investment. Over a year that would be $59.02 in interest . This the 5.96% rate. ($59.02/995.46=5.928% so the rounding comes into play but the pure rate is 5.96%)

Ok - sorry, I have another stupid question. Is there any risk involved with these? I see from a quick google search that they are backed by the U.S. Government, but is there something I am missing?

They are the risk free standard in the US. Everything else is presumed to have more risk.

I assume.