Treasury Bills, Notes, and Bonds Discussion 2024+

[imbatman]

Can any of you speak to whether any portion of FZDXX earnings is free of state tax before we ship off our tax data? I'd love to point out possible tax savings to our preparer.

Based on that PDF from Fidelity above, they marked Money Market Fund (all classes) as "*This fund did not meet the minimum investment in U.S. government securities required to exempt the distribution from tax in California, Connecticut, and New York."

Those three all have a rule whereby each only allows a state-tax exemption if at least 50% of the fund’s assets at the end of each calendar quarter were in eligible government securities.

Sorry for you, luckily I can calculate and take whatever tiny percentage my funds have for my state. You may want to look at FSPXX......

 

[Dash man]

Just ordered a 6 month treasury bill at auction after JP Morgan Chase called a 5.6% CD.

 

[joesxm3]

I switched to FDLXX which has 90% in exempt from state tax stuff.

You can't have this as a choice for your core fund, but you can buy it in your account like any mutual fund and I think they will draw from it when your core fund does not have enough to cover what you are spending. If not, you can always sell some FDLXX the day before and then spend it.

 

[calmloki]

I switched to FDLXX which has 90% in exempt from state tax stuff.

You can't have this as a choice for your core fund, but you can buy it in your account like any mutual fund and I think they will draw from it when your core fund does not have enough to cover what you are spending. If not, you can always sell some FDLXX the day before and then spend it.

Also seems to be closed to new investors fund. Ah well.

 

[copyright1997reloaded]

Also seems to be closed to new investors fund. Ah well.

I was just able to enter an order for it... (FDLXX)

 

[imbatman]

Yes I switch back and forth between FDLXX and FZEXX, depending on my mood and rates at the time I have spare cash. At Fido, these won't sweep in, but they will "sweep" out without you having to do anything. When I asked them how they choose what to liquidate to fund placed orders, this was the response I got (highest balance in each category would go first, if you have multiple holdings in a category):

1. Core Account Until Liquidated
2. Taxable Money Markets Until All Liquidated
3. Tax Free Money Markets Until All Liquidated

Note that at Fido, only Fido funds are eligible for the auto liquidation feature.

 

[audreyh1]

FDLXX is not closed to new investors.

 

[calmloki]

This is what I saw:
https://fundresearch.fidelity.com/f...turnsYear3/desc/1?order=tickers&tickers=FDLXX

When I go to Fidelity and sign in and do a dummy purchase attempt it is willing to take my money, so... oops - looks like it's open.

 

[audreyh1]

Don’t see anything from your link saying closed to new investors. Maybe the page is displaying differently on my browser.

 

[Sunset]

Also seems to be closed to new investors fund. Ah well.

Which State are you in ? as it's very State dependent.

 

[MBSC]

This is what I saw:
https://fundresearch.fidelity.com/f...turnsYear3/desc/1?order=tickers&tickers=FDLXX

When I go to Fidelity and sign in and do a dummy purchase attempt it is willing to take my money, so... oops - looks like it's open.

Don’t see anything from your link saying closed to new investors. Maybe the page is displaying differently on my browser.

I see the following generic footnote below add symbols on Firefox desktop browser.

* Closed Fund | ** Closed to New Investors

However, since there is no (*) or (**) next to the fund name, it is not closed.

 

[calmloki]

I see the following generic footnote below add symbols on Firefox desktop browser.

* Closed Fund | ** Closed to New Investors

However, since there is no (*) or (**) next to the fund name, it is not closed.

Ayup. That was my goof.

 

[jim584672]

Picked up some 42 day T-Bills 5.401%.

 

[audreyh1]

Yeah, rates have popped a bit compared to a month ago.

 

[jldavid47]

Yeah, rates have popped a bit compared to a month ago.

Yes they have. As an example...

Last six 26-week auctions: 5.188%, 5.237%, 5.199%, 5.263%, 5.285%, 5.322%. Up 13.4 basis points in 5 weeks.

The 52-week went from 4.814% 4 weeks ago to 4.950% yesterday. Up 13.6 basis points.

 

[audreyh1]

This week‘s T-bill auction results:

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
4-Week	No	912797JK4	02/27/2024	5.285%	5.395%	$99.588944
8-Week	No	912797JP3	02/27/2024	5.275%	5.407%	$99.179444
13-Week	No	912797HR1	02/22/2024	5.230%	5.388%	$98.677972
17-Week	No	912797KG1	02/27/2024	5.215%	5.395%	$98.276153
26-Week	No	912797KC0	02/22/2024	5.100%	5.322%	$97.421667
52-Week	No	912797KA4	02/22/2024	4.695%	4.950%	$95.252833

Rates have popped a bit and seem to be hanging on to the higher levels.

 

[Maximus]

13 week Tbill announced today 2/29. Auction date is 3/4. With my Schwab account today 2/29 I execute a same day transaction of selling X dollars of SWVXX and purchasing the same X dollars of the 13 week Tbill. The Schwab sweep account pays next to nothing while the SWVXX has been floating around 5.2 percent.

I assume you loose the SWVXX rate until 3/4. Is it better to do the trade Monday morning before the auction goes off. I know it is not a lot of money but I would just like to know the correct answer to the question.. Thanks.

 

[audreyh1]

This weeks T-bill auction results:

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
4-Week	No	912797JL2	03/05/2024	5.285%	5.381%	$99.588944
8-Week	No	912797JQ1	03/05/2024	5.285%	5.403%	$99.177889
13-Week	No	912797HS9	02/29/2024	5.255%	5.400%	$98.671653
17-Week	No	912797KH9	03/05/2024	5.225%	5.391%	$98.272847
26-Week	No	912797KD8	02/29/2024	5.130%	5.340%	$97.406500

The rate rise continues. I picked up a 26 week T-Bill this week. 5.340% nice move up from the 5.199% a month ago. I also noticed that the 52 week T-bill was trading above 5% recently.

Notes for Feb 2024:

Notes	Reopening	CUSIP	Issue Date	High Yield	Interest Rate	Price per $100
2-Year	No	91282CKB6	02/29/2024	4.691%	4.625%	$99.875391
3-Year	No	91282CKA8	02/15/2024	4.169%	4.125%	$99.877119
5-Year	No	91282CKD2	02/29/2024	4.320%	4.250%	$99.688225
7-Year	No	91282CKC4	02/29/2024	4.327%	4.250%	$99.539228
10-Year	No	91282CJZ5	02/15/2024	4.093%	4.000%	$99.243059

 

[wallygator69]

Howdy,


I'm having trouble buying a 26 week when VMFXX is paying more now...



I am thinking the fed isn't going to lower for more than 6 month.



Are you buyers of 26 weekers locking in just in case fed does lower rates or am I missing something?


Thx


Wally

 

[jldavid47]

13 week Tbill announced today 2/29. Auction date is 3/4. With my Schwab account today 2/29 I execute a same day transaction of selling X dollars of SWVXX and purchasing the same X dollars of the 13 week Tbill. The Schwab sweep account pays next to nothing while the SWVXX has been floating around 5.2 percent.

I assume you loose the SWVXX rate until 3/4. Is it better to do the trade Monday morning before the auction goes off. I know it is not a lot of money but I would just like to know the correct answer to the question.. Thanks.

First, the trade is technically not complete until the settlement date which in this case is 3/7. You can put in the order to buy at auction any time between the time the auction appears on Schwab on 2/29 and 9:30AM on the date of the auction (3/4 in this case).

About mid-day on 3/4 the trade is shown as filled on Schwab and if you have insufficient funds to cover it at that time your account will show a negative cash balance. Don't panic. As long as the amount is covered by the day of settlement, you are not charged margin interest (in a margin account) or penalized (in a non-margin account which means you will have to have funds in the account up-front going forward). That means you can sell the shares in SWVXX on 3/6 (the day before the T=Bill settlement) which will settle on 3/7 and cover the purchase.

I do this all the time at Schwab in both my margin and retirement accounts. It's a matter (for me) of setting reminders to put in the SWVXX sale order.

Another scenario is using the funds of a maturing T-Bill to cover the auction purchase of a new T-Bill. Just yesterday I bought an 8-week T-Bill at auction that settles on Tuesday, 3/5. I have a previous 8-week T-Bill maturing that day. My account currently shows a negative cash balance which is fine since the funds from the maturing T-Bill will be in the account on settlement day to cover the new purchase. I will confess it took me a couple of tries before I became comfortable with this process, but it works.

 

[jldavid47]

I'm having trouble buying a 26 week when VMFXX is paying more now...

Do you pay state income tax? In my case T-Bills are better after accounting for state income tax.

I am thinking the fed isn't going to lower for more than 6 month.

It doesn't really matter what you think. Whatever is going to happen is going to happen.

Are you buyers of 26 weekers locking in just in case fed does lower rates or am I missing something?

If I was really concerned about rates crashing lower, I'd be extending maturities a lot farther out than 26 weeks. For me, it's just a matter of continuing to follow a laddering plan I put in place two years ago. If rates actually crash, I'll need to reconsider.

 

[Maximus]

First, the trade is technically not complete until the settlement date which in this case is 3/7. You can put in the order to buy at auction any time between the time the auction appears on Schwab on 2/29 and 9:30AM on the date of the auction (3/4 in this case).

About mid-day on 3/4 the trade is shown as filled on Schwab and if you have insufficient funds to cover it at that time your account will show a negative cash balance. Don't panic. As long as the amount is covered by the day of settlement, you are not charged margin interest (in a margin account) or penalized (in a non-margin account which means you will have to have funds in the account up-front going forward). That means you can sell the shares in SWVXX on 3/6 (the day before the T=Bill settlement) which will settle on 3/7 and cover the purchase.

I do this all the time at Schwab in both my margin and retirement accounts. It's a matter (for me) of setting reminders to put in the SWVXX sale order.

Another scenario is using the funds of a maturing T-Bill to cover the auction purchase of a new T-Bill. Just yesterday I bought an 8-week T-Bill at auction that settles on Tuesday, 3/5. I have a previous 8-week T-Bill maturing that day. My account currently shows a negative cash balance which is fine since the funds from the maturing T-Bill will be in the account on settlement day to cover the new purchase. I will confess it took me a couple of tries before I became comfortable with this process, but it works.

Thank you jldavid47. Great information. Always learning new things here.

 

[audreyh1]

Howdy,


I'm having trouble buying a 26 week when VMFXX is paying more now...



I am thinking the fed isn't going to lower for more than 6 month.



Are you buyers of 26 weekers locking in just in case fed does lower rates or am I missing something?


Thx


Wally

I’m at Fidelity, not Vanguard, and the 26 week rate still does exceed what the highest paying mutual fund is paying there. I also notice that the FZDXX rate has dropped slightly over the past month.

Regardless in my cash (i.e. very short term) holdings I tend to keep a mix of high quality assets, MM Funds, T-Bills and CDs with a mix of short-term durations.

I have no idea what the Fed is going to do and don’t try to guess.

 

[copyright1997reloaded]

Howdy,


I'm having trouble buying a 26 week when VMFXX is paying more now...



I am thinking the fed isn't going to lower for more than 6 month.



Are you buyers of 26 weekers locking in just in case fed does lower rates or am I missing something?


Thx


Wally

Most are following a laddering plan or trying to keep average duration from dropping too much. That is what I am doing to a certain extent.

Regarding FZDXX, if you just want the best rate (regardless of duration), you should be buying the 2-month T-Bill which is currently yielding 5.4% (while FZDXX is 5.16% AND the T-Bill has state tax advantages). Not a lot of duration risk @ 8 weeks.

 

[Marc]

Most are following a laddering plan or trying to keep average duration from dropping too much. That is what I am doing to a certain extent.

Regarding FZDXX, if you just want the best rate (regardless of duration), you should be buying the 2-month T-Bill which is currently yielding 5.4% (while FZDXX is 5.16% AND the T-Bill has state tax advantages). Not a lot of duration risk @ 8 weeks.

I continue to be surprised at how much 4 week, 42 day, 8 week, and 13 week inventory is being sold at higher rates than one year or longer; why is the government paying more than they need to? I know I should be looking at one year CDs but I like the income from 42 day and 26 week Treasures; this is in IRA so no state tax savings. A very large position in FTBFX covers the longer durations.

Marc