Treasury Bills, Notes, and Bonds Discussion

[audreyh1]

Fzdxx - 3.81%

 

[JoeWras]

Cool! Thank you both.

SNAXX has $1M minimum. FZDXX has $100K minimum. I'm not pooh-poohing that, just pointing it out to the audience that may not know.

I forget about looking at those because of the minimums.

SNAXX

SWVXX is 3.76%

Fzdxx - 3.81%

 

[pb4uski]

Cool! Thank you both.

SNAXX has $1M minimum. FZDXX has $100K minimum. I'm not pooh-poohing that, just pointing it out to the audience that may not know.

I forget about looking at those because of the minimums.

But SWVXX, SNAXX no minimum cousin, is yielding 3.76%.

 

[audreyh1]

Cool! Thank you both.

SNAXX has $1M minimum. FZDXX has $100K minimum. I'm not pooh-poohing that, just pointing it out to the audience that may not know.

I forget about looking at those because of the minimums.

Within an IRA the initial minimum on FZDXX is $10K.

 

[MBSC]

FZDXX has $100K minimum.

Within an IRA the initial minimum on FZDXX is $10K.

SPRXX (3.69%) is FZDXX with no initial minimum.

https://institutional.fidelity.com/app/fund/sasid/details/454.html

 

[audreyh1]

SPRXX (3.69%) is FZDXX with no initial minimum.

https://institutional.fidelity.com/app/fund/sasid/details/454.html

Thanks, I hadn’t noticed that option. Probably because once you invest the initial amount into FZDXX you can move funds out whenever you need to and maintain a low base.

 

[Chuckanut]

SNOXX is 3.49%.

 

[JoeWras]

SNOXX is 3.49%.

Don't sound out that name!

Meanwhile, my credit union money market is 0.25%. Awesome, baby!

I've been telling all my friends to wake up and do *something*. SNOTS, SNACKS, FEDRIX, SPACKS -- whatever you can do -- it has to be better than your bank. Get moving.

 

[Trooper]

I've been telling all my friends to wake up and do *something*. SNOTS, SNACKS, FEDRIX, SPACKS -- whatever you can do -- it has to be better than your bank. Get moving.

+1. My Ally online savings account is now up to 3%.

 

[JoeWras]

+1. My Ally online savings account is now up to 3%.

A great choice for those who want FDIC insurance.

 

[audreyh1]

This weeks T-Bill auction results:

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
4-Week	No	912796ZH5	12/06/2022	3.950%	4.017%	$99.692778
8-Week	No	912796ZM4	12/06/2022	4.080%	4.163%	$99.365333
13-Week	No	912796YB9	12/01/2022	4.285%	4.392%	$98.916847
17-Week	No	912796Z93	12/06/2022	4.430%	4.558%	$98.535639
26-Week	No	912796ZG7	12/01/2022	4.550%	4.722%	$97.699722
52-Week	No	912796ZD4	12/01/2022	4.555%	4.784%	$95.394389

Looks like all up except for 4- and 8-week which dropped a bit.

Last weeks: https://www.early-retirement.org/fo...d-bonds-discussion-115186-45.html#post2857795

 

[MarieIG]

Thanks Audrey!

 

[pb4uski]

This weeks T-Bill auction results:

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
4-Week	No	912796ZH5	12/06/2022	3.950%	4.017%	$99.692778
8-Week	No	912796ZM4	12/06/2022	4.080%	4.163%	$99.365333
13-Week	No	912796YB9	12/01/2022	4.285%	4.392%	$98.916847
17-Week	No	912796Z93	12/06/2022	4.430%	4.558%	$98.535639
26-Week	No	912796ZG7	12/01/2022	4.550%	4.722%	$97.699722
52-Week	No	912796ZD4	12/01/2022	4.555%	4.784%	$95.394389

Looks like all up except for 4- and 8-week which dropped a bit.

Last weeks: https://www.early-retirement.org/fo...d-bonds-discussion-115186-45.html#post2857795

So is the "High Rate" the coupon rate and the "Investment Rate" the YTM since the prices are at a discount to par?

 

[audreyh1]

So is the "High Rate" the coupon rate and the "Investment Rate" the YTM since the prices are at a discount to par?

No, T-bills are all zero coupon. The high rate is related to the auction bidding and not annualized AFAIK. It can be ignored. The investment rate is annualized and equivalent to APR on a CD.

 

[pb4uski]

No, T-bills are all zero coupon. The high rate is related to the auction bidding and not annualized AFAIK. It can be ignored. The investment rate is annualized and equivalent to APR on a CD.

Ok, I forgot that they were zero coupon... but if I pay $95.394389 today and receive $100 in a year, my yield is 4.827%... [($100/$95.394389)-1]... but the table shows 4.784%.

XIRR for 52 weeks is 4.842%

	4.842%
12/01/22	-95.394389
11/30/23	100.000000

Any idea how they get 4.784%?

 

[JoeWras]

Ok, I forgot that they were zero coupon... but if I pay $95.394389 today and receive $100 in a year, my yield is 4.827%... [($100/$95.394389)-1]... but the table shows 4.784%.

XIRR for 52 weeks is 4.842%

4.842%

12/01/22 -95.394389

11/30/23 100.000000

Any idea how they get 4.784%?

Here's a link directly from the government. I'm done with school and work, so I'm not doing the math. A lot of smart people have confirmed that this investment rate is within a few bp of APR. Some of it matters due to "simplified" (less than 1/2 year) versus long calculation.

All described in excruciating detail in this paper directly from the treasury. (PS: the excel formula is simplified).

https://www.treasurydirect.gov/instit/annceresult/press/preanre/2004/ofcalc6decbill.pdf

 

[audreyh1]

Results from the 13-week and 26-week T-bill auction today. 13-week is slightly lower than last week, the 26-week is slightly higher.

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
13-Week	No	912796YK9	12/08/2022	4.270%	4.377%	$98.920639
26-Week	No	912796ZP7	12/08/2022	4.570%	4.743%	$97.689611

 

[lawman]

Results from the 13-week and 26-week T-bill auction today. 13-week is slightly lower than last week, the 26-week is slightly higher.

Bills	CMB	CUSIP	Issue Date	High Rate	Investment Rate	Price per $100
13-Week	No	912796YK9	12/08/2022	4.270%	4.377%	$98.920639
26-Week	No	912796ZP7	12/08/2022	4.570%	4.743%	$97.689611

What is high rate?
What is investment rate?

 

[ShokWaveRider]

What happens to T-Bill maturities if the Debt Ceiling is stalled for some reason?

 

[audreyh1]

What is high rate?
What is investment rate?

Ignore high rate it has to do with the bidding process.

Investment rate is what to compare to APR on a CD.

 

[audreyh1]

What happens to T-Bill maturities if the Debt Ceiling is stalled for some reason?

That affects issuing new debt, not servicing existing debt.
https://www.gao.gov/blog/federal-debt-has-reached-its-ceiling.-what-does-mean

 

[Bruno]

Within an IRA the initial minimum on FZDXX is $10K.

Do you know what the initial minimum is in a ROTH for FZDXX?

 

[audreyh1]

Do you know what the initial minimum is in a ROTH for FZDXX?

My guess would be $10K because that’s the IRA minimum as it is a Roth IRA. https://fundresearch.fidelity.com/mutual-funds/fees-and-prices/31617H805

 

[pb4uski]

That affects issuing new debt, not servicing existing debt.
https://www.gao.gov/blog/federal-debt-has-reached-its-ceiling.-what-does-mean

No, incorrect. If the Treasury can no longer borrow money it could impact the payments of interest and par value at maturity for existing Treasury securities... from the link that you provided:

...If delays persist and Treasury’s extraordinary measures are exhausted, it could be forced to delay or even default on payments to investors until money becomes available. A default would have devastating effects on U.S. and global economies and the public. It would immediately and significantly decrease demand for Treasury securities and increase costs. ...

If the Congresscritters fail to either eliminate or increase the debt ceiling it will shortly thereafter be a sh!tsh*w of epic proportions. It's moronic to even give it a thought.

 

[audreyh1]

Thanks.