Max [maxmyinterest.com]

Discussion of the Cash portion of the Permanent Portfolio

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ochotona
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Re: Max [maxmyinterest.com]

Post by ochotona » Sun Jul 08, 2018 7:27 am

Ally 1.75%
Marcus 1.80%
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jhogue
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Re: Max [maxmyinterest.com]

Post by jhogue » Sun Jul 08, 2018 2:29 pm

Note the effects of the FOMC’s deliberate flattening of the yield curve on investors’ Deep Cash choices:

3 month Treasury = 1.96%
1 year Treasury = 2.37%
30 year Treasury = 2.93%

1. Given that a 1 year T-bill now captures an astounding 93% of the yield of a 30 year T-bond, AND that the FOMC is transparently promising to raise the Fed Funds rate twice before the end of 2018, anyone who buys a longer term Treasury or CD seems to be buying unnecessary interest rate risk.

2. While I bonds for “deep cash” currently offer a comparatively attractive 2.52% (2.70% tax equivalent yield for this MN resident), and I purchased my usual limit of $5,000 paper I bonds with my 2017 IRS refund earlier this year, I will still be waiting until the November 2018 reset to purchase electronic I bonds from Treasury Direct in anticipation that there is almost certainly another increase in the I bond fixed rate component in the offing.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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ochotona
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Re: Max [maxmyinterest.com]

Post by ochotona » Sat Jul 14, 2018 7:06 am

MangoMan wrote:
Sun Jul 08, 2018 8:19 am
ochotona wrote:
Sun Jul 08, 2018 7:27 am
Ally 1.75%
Marcus 1.80%
Meh
(Quasi Treasury) Vanguard Federal MM 1.84%
Purepoint 1.9%
Vanguard Prime MM 2.04%
Though I have wondered about just buying 30-day Bills. I don't like the TreasuryDirect user interface, though I use it for I-Bonds. Plus what if we had a real emergency just after buying some 30-day Bills? My wife would never, ever use TD. Schwab? I'd hate to have to remember to reinvest the proceeds. If you are a day late, you give up all the rate advantages.
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ochotona
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Re: Max [maxmyinterest.com]

Post by ochotona » Sat Jul 14, 2018 9:03 am

Desert wrote:
Sat Jul 14, 2018 7:47 am
I agree with pug, it appears that Fidelity is the best platform right now for short treasuries, due to the auto-roll.

Would you buy 30 day or go out to a year, as Jhogue has suggested? That ~2.34% for 1 year looks good.

I'll probably stick with Vanguard Treasury MM at 1.84% for now, since I don't want to open another account right now.
I'm going to shut down Marcus. Indeed, no point in it. Fidelity set-up, funding underway.
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jhogue
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Re: Max [maxmyinterest.com]

Post by jhogue » Mon Jul 16, 2018 12:01 pm

I like using Fidelity to buy and own T-bills directly. It completely avoids the manager risk associated with ETFs and mutual funds. Also, the expense ratio (0.00% !!!) simply cannot be beat.

When I first started buying T-bills, I wondered if Fidelity might be tempted to pump up the bid/ask spread to pay for this free service. As far as I can tell, that is not the case. I occasionally check the spread and have found that it hovers around 0.03% for a current 1 year T-bill.

I don’t know for sure, but I am guessing that Fidelity can make this deal available for small retail investors because they have to hold a massive amount of T-bills to support their many mutual funds and other investment products. Perhaps some demand is also be coming from their institutional investors for whom the FDIC cap of $250,000 makes CDs unsuitable.
“Groucho Marx wrote:
A stock trader asked him, "Groucho, where do you put all your money?" Groucho was said to have replied, "In Treasury bonds", and the trader said, "You can't make much money on those." Groucho said, "You can if you have enough of them!"
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ochotona
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Re: Max [maxmyinterest.com]

Post by ochotona » Mon Jul 16, 2018 12:52 pm

I can't wait! Big slug of dough coming out of Marcus to Fidelity. Maybe tomorrow.
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ochotona
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Re: Max [maxmyinterest.com]

Post by ochotona » Mon Jul 16, 2018 2:06 pm

Fidelity posts the T-Bill offers after 2 pm Eastern on Thursdays. I bought some secondary market Bills today.
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Re: Max [maxmyinterest.com]

Post by ochotona » Mon Nov 19, 2018 7:55 pm

Ally paying 2% now
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