This week’s T-bill auction results – I got schooled


Following up on my post of a few days ago, in which I wrote that I’d decided not to invest in the 4- and 13-week T-bill auctions this week, I present the results of yesterday’s and today’s auctions:

13-week T-bill (auction date: 8/20/2007): APY = 2.95%
4-week T-bill (auction date: 8/21/2007): APY = 4.96%

What’s perplexing is that the Daily Treasury Yield Curve for the 4-week bill dipped to 2.47% (!) just yesterday, August 20, 2007.

I was feeling good about my decision yesterday, but I was really surprised today.

I guess I’ve learned my lesson: for the 4-week T-bill, I might as well stick to laddering. I only lock up my money for a month’s time, and it seems the yield curve is not necessarily a good predictor of results.


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4 Feedbacks on "This week’s T-bill auction results – I got schooled"


Why invest in the T-bill when you can earn that or more with HSBC?


Because T-bills are state-income tax exempt, and CA’s income tax is 9.6%. If I can get the same nominal return, the tax-effective yield is quite a bit higher for me with a T-bill.


Do you have that much money available to invest that it makes a difference whether or not you get 5.5% taxable or 4.96% state tax exempt over 13 weeks? It sounds like too much hassle for me.


No, at those rates it wouldn’t make a difference to me, but I’m averse to proliferating bank accounts, so since Treasury Direct works with any checking account, I prefer to use that instead with the one I have at my credit union.