2007 4-Week T-Bill Rates: The Complete Picture

When 2007 began, the rates of the 4-week T-bill were very attractive, with returns as high as 5.4% APY. Before FNBO Direct launched their 6.0% APY promotional rate early last year, 4-week T-bills were my main short-term investment vehicle for the good returns and automatic investments that were very easy to manage.

However, things started to turn ugly in the summer and the interest rates couldn’t keep pace with major online banks. When the current cycle of rate reductions began, the 4-week T-bill’s rate just kept dropping like a rock, at a much faster speed than online banks lowering their interest rates. When 2007 ended, the investment rate of 4-week T-bills barely stayed above 3.0% APR level.

2007 4-Week T-Bill Rates

I dumped our investments in T-bills in early June and am glad I did. Now with the Fed expected to cut its benchmark interest rate again late this month, yields of online savings accounts will move lower. Pretty soon, 5.0+% APY will become history (check out the latest bank offers and you will see only a few banks still have yields above 5.0%). I wonder what the alternatives are in order to get good returns with flexible withdraw policies.

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2 Responses to “2007 4-Week T-Bill Rates: The Complete Picture”

  1. John Smith |  Jan 04, 2009 at 3:58 pm

    I would LOVE to be earning 5% on T-bills now. Here is the list of losers that stole the taxpayers money and are responsible for the abysmal rates now. They should be in prison for committing extortion against our economy.

    The TARP has so far committed the following funding:

    AIG $40 billion

    JPMorgan $25 billion

    Citigroup $25 billion

    Wells Fargo $25 billion

    Bank of America $15 billion

    Merrill Lynch $10 billion

    Goldman Sachs $10 billion

    Morgan Stanley $10 billion

    PNC Financial Services $7.7 billion

    Bank of New York Mellon $3 billion

    State Street Corp $2 billion

    Capital One Financial $3.55 billion

    Fifth Third Bancorp $3.45 billion

    Regions Financial $3.5 billion

    SunTrust Banks $3.5 billion

    BB&T Corp $3.1 billion

    KeyCorp $2.5 billion

    Comerica $2.25 billion

    Marshall & Ilsley Corp $1.7 billion

    Northern Trust Corp $1.5 billion

    Huntington Bancshares $1.4 billion

    Zions Bancorp $1.4 billion

    First Horizon National $866 million

    City National Corp $395 million

    Valley National Bancorp $330 million

    UCBH Holdings Inc $298 million

    Umpqua Holdings Corp $214 million

    Washington Federal $200 million

    First Niagara Financial $186 million

    HF Financial Corp $25 million

    Bank of Commerce $17 million

    TOTAL: $203.08 billion