4% for a 9-month US Treasury?

The Federal Reserve is fighting inflation, and they’re raising interest rates to do so.  There are pros and cons to higher rates, as you can imagine.  But we’re going to focus on one pro today…you can earn interest on your cash again.

Savings accounts and money markets have been slow to recognize the higher rates available in the market.  This means if you’re sitting on a pile of cash in the bank, you might consider directing some of this into short-term US Treasuries.

As of this writing (2:41pm on 9/22/22), here are the posted rates on Schwab’s fixed income trading site:

    • A 3-month Treasury bill maturing 1/3/2023 has a yield to maturity of 3.26%
    • A 6-month Treasury bill maturing 3/23/2023 has a yield to maturity of 3.89%
    • A 9-month Treasury bill maturing 6/30/2023 has a yield to maturity of 4.02%
    • A 1-year Treasury maturing 12/31/2023 has a yield to maturity of 4.18%

From there rates tick lower.  The 5-year maturity yields 3.97% and the 10-year yields 3.71%.

With short-term Treasuries, we can invest money for short-term cash needs.  These often include quarterly tax estimates, income tax due in April, and funding monthly living expenses in retirement.

If we have piqued your interest (pun intended), contact your Lead Advisor to discuss.

 

Clicking on the links above may result in you leaving the Pittenger & Anderson, Inc. website. The opinions and ideas expressed on these external websites are those of third-party vendors and Pittenger & Anderson, Inc. has not approved or endorsed any of this third-party content. For the full Terms & Conditions of using the Pittenger & Anderson, Inc. website, click on this link.

Pittenger & Anderson, Inc. does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction.  Additionally, the information presented here is not intended to be a recommendation to buy or sell any specific security.  To learn more about our firm and investment approach, check out our Form ADV.

To view this article and others like it online, visit the P&A blog at https://pittand.com/blog/.

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Since 1995, Pittenger & Anderson has guided individuals and families going through money-in-motion events. We are a fee-only Registered Investment Advisor and a full-time fiduciary providing investment management, financial planning, and complimentary services to 700+ clients in over 30 U.S. states.

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