Treasuries Crush Bank Rates – Orlando Sentinel

The Federal Reserve continues to push interest rates higher, sending the stock market into turmoil. After all, who should take the risk of stocks if you can safely earn interest on an FDIC-insured bank account or on Treasury bills, which are short-term IOUs directly from the government?

In recent years, savers have been penalized for keeping money in safe, short-term investments. Interest rates have been below “normal” – pushed down by Fed policies and banks thinking they don’t need to pay higher rates to attract depositors looking for security. It takes some time for banks to pass on these higher rates.

But suddenly you can earn more on your “chicken money” – almost 4% – safely!

And the good news is that you are now able to easily take advantage of these higher rates on the open market. You’ve probably opened an account at to buy those attractive Series I Savings Bonds. Well, you can use that same account to buy Treasury Bonds, the safest and best credit in the world.

As of this writing, six-month Treasury bills are yielding almost 4%! The rate changes every week during the huge auction (read below). Here are the details.

Yes, this is the same account you opened to buy savings bonds. Once you are logged into your TreasuryDirect account, click on the tab marked “Buy Direct”. Then click on “Treasury bills”. You’ll have a choice of maturities, so scroll down to 26 weeks – six months.

You will have the choice of the next weekly auction dates. Choose one, then scroll down to insert the dollar amount of your purchase. Your bank information will load automatically. Click “buy” and you are ready for the Treasury to debit your current account on the day of the auction.

You get the rate set at auction, usually within a few basis points of the current six-month Treasury bill rate you can find on CNBC. Interest is deposited directly into the same bank account.

You will also be asked if you would like your Treasury Bills to be automatically “rolled over” at maturity, accepting the interest rate then in effect. I suggest selecting at least two or three automatic rollovers. You can always access your TreasuryDirect account and change this direction, if you want the money returned to your bank account when the T-bill matures.

But you cannot get the money back before the due date.

You can buy treasury bills with maturities ranging from three months to one year, as well as longer-term treasury bills. A tip: Buy every two or three weeks by staggering the deadlines. Then, if rates go up when you roll, you’ll enjoy higher rates as each matures. (And the reverse if rates drop six months from now when your Treasuries mature.)

You don’t need to have a lot of money to get started. The minimum investment in treasury bills is only $100. And it’s easy to buy them. Simply go to and follow the “guided tour” to learn how to open an account.

You will need your social security number, as well as your bank routing number and account number, which you will find on your checks. You’ll be setting up a password-protected account in minutes. It’s the same security that protects trillions of treasuries traded daily, so don’t worry about doing it online. Even a tech-savvy consumer can do this easily, I promise.

Your bank will be sorry to see that low-interest money disappear! But you’ll appreciate seeing the higher interest payments automatically deposited into your checking or savings account. It’s the wild truth!

(Terry Savage is a Registered Investment Advisor and the author of four bestselling books, including “The Savage Truth on Money”. Terry answers questions on his blog at ©2022 Terry Wild. Distributed by Tribune Content Agency, LLC.