lawman
Thinks s/he gets paid by the post
Government Agencies often offer slightly better yields than C.D.'s or Treasuries. What are they and how safe are they?
Government Agencies often offer slightly better yields than C.D.'s or Treasuries. What are they and how safe are they?
Yeah, I just bought some 4% FHLB 3-year bonds today. I view them as parhaps a half a notch lower than UST from a credit risk perspective but still Aaa.
That's where laddering comes into play. If you buy bonds and CDs with varying maturities, you can have one maturing every few months or even every month that you then get to reinvest at the prevailing rates at the time. Personally, since the spring, I've been building a monthly ladder that currently runs through 9/23. With the money I just got, I'm going to extend it out to 2025, possibly longer.Looks good to me but when I realize I have some bonds and c.d.'s paying less than 1% that I bought just a few months ago I am hesitant to go out 3 years...
Looks good to me but when I realize I have some bonds and c.d.'s paying less than 1% that I bought just a few months ago I am hesitant to go out 3 years...
That's where laddering comes into play. If you buy bonds and CDs with varying maturities, you can have one maturing every few months or even every month that you then get to reinvest at the prevailing rates at the time. Personally, since the spring, I've been building a monthly ladder that currently runs through 9/23. With the money I just got, I'm going to extend it out to 2025, possibly longer.
Agency bonds are fully taxable unlike Treasuries which are state tax free.