5 ms·
The yield on the 1 year t-bill has gone from 0% to 2% That’s where I’ll be keeping cash I’d otherwise keep at the bank, for now.
by danhak 4y ago
The yield on the 1 year t-bill has gone from 0% to 2%
That’s where I’ll be keeping cash I’d otherwise keep at the bank, for now.
- baremetal 4y agoexcept rates are gonna keep going up, meaning your principle would decline in value.
- ericd 4y agoIf you're keeping it to term, the only issue is the 1 year of opportunity cost - you get your full principal back at the end. But if your alternative was to keep it in a savings account at a bank, there's no opportunity cost.
- bombcar 4y agoGrabbing some I Bonds could be worth it.
- deleted 4y ago[deleted]
- danhak 4y agoI'm already maxed out at $10,000 for this year.
- Asparagirl 4y agoGot kids? Look up “minor” accounts. Got an LLC or a family trust of some sort? Look up “entity” accounts.
- abnercoimbre 4y agoSo I can purchase bonds as an individual and also as the owner of my LLC?
- Asparagirl 4y agoYes! I did this last year and plan to do it again this year. I have a one-year-old single-member LLC for my plant h̶o̶b̶b̶y̶ very small business. I grow and sell fancy houseplants, unusual chili peppers, hopefully some mostly-dahlia bouquets later this summer, etc. I mainly sell on Etsy and eBay. Usually, forming and keeping up an LLC would probably be overkill for a little business like this, but starting in 2021, the state of California waived their usually ridiculous LLC formation fees and annual LLC fees, to help people start new small businesses after the pandemic. So I jumped on the wagon and put my h̶o̶b̶b̶y̶ business into a real LLC. So now my husband and I have a bunch of I Bonds in our names/SSNs at TreasuryDirect, and each of our kids has a "minor" account linked to our account there, and they each have I Bonds in their names/SSNs -- and my little houseplant LLC has its own "entity" account at TreasuryDirect, based on its EIN, with me as the authorized representative who can buy and sell on behalf of the LLC. And so the LLC owns I Bonds in its own name, even though this is a single-member LLC, just me. It doesn't even merit getting its own tax return, it just reports its (my) teensy profits on my personal Schedule C, but the US Treasury treats it as a real separate entity from me even if the IRS does not. Heck, I think the LLC as an entity now owns slightly more in I Bonds than it made in profit last year. Now, if by some miracle the state of California should decide to continue its temporary pandemic policy to not charge residents to form and maintain LLC's, one could hypothetically set up many such new single-member LLCs, each with its own EIN of course, and each LLC could then set up its own TreasuryDirect account, and each account could buy I Bonds or other Treasuries... Also noteworthy: you don't get an annual 1099 from TreasuryDirect unless you sell the bonds that calendar year. The interest only formally accrues to you upon a sale. And they're federally tax-free anyway.
- abnercoimbre 4y agoThis is amazing, I never knew. Thank you!