Buying secondary issues thru Fidelity

[Brat]

I found a really short Treasury online that appeared to have an attractive yield so considered buying 40 for Mom. When I plugged in the $$ (including transaction cost of $0.50/each) the actual yield was half that rate, significantly less than mm (you "buy" the accrued interest). Because Mom doesn’t need the state tax preference I passed. Anyone else have this experience??

 

[brewer12345]

I don't deal with Fido, but you might consider just buying some 3 or 6 month treasuries at auction. Like Schwab, I think Fido lets you buy treasuries as auction for nothing.

 

[mathjak107]

When you buy a bond on the secondary market you have to pay all accumulated interest to the owner  up to that point so it seems like you are paying alot more than you are. Dont forget the treasuries pay interest every 6 months so lets say you buy a month before the interest is paid out.. You would pay the old owner 5 months interest when you buy as well as the price of the bond. You then keep the 6 months interest thats paid the following month and your reimbursed and clear 1 months interest for the exact amount of time you owned it..