2007 4-Week T-Bill Rate Update

The rates of 4-week T-bills tumbled in recent weeks, dropping nearly 50 basis points in a matter of four weeks. The investment rate from last week’s auction is 4.683%, equivalent to a 4.79% APY.

4wt_05071.png

Even when factoring in the NJ state income tax, the equivalent yield is only at 5.11% APY, falling quite far behind the 5.30% APY I get from IGoBanking. Looking at the historical data of 2007, the rates of 4-week T-bill are showing a bell shape curve. For nearly two months from February to early April, 4-week T-bill beat all the major online banks easily with surperior rates close to 5.8% APY. Now the balance has shifted and online savings accounts get the upper hand. Well, I guess that’s one of the problems of investing in T-bills: you never know exactly what you are getting until you actually get it.

I need to keep an eye on the T-bill rate in the coming weeks to see where it is going. If it continues the current trend, I will have to reconsider my investments. There is no reason to keep buying the bill even if the rate stablizes at this level. Right now, I am buying $6,000 of T-bills every week. If I do stop the purchase, what I will be facing is finding an alternvative to invest the cash. A 5.30% return is fine, but I feel I can get a little more. One option is to open an account at FNBO Direct bank and lock in the 6.0% APY till September when the $32K I borrowed from Bank of America expeires. However, getting another account is going in the opposite direction in simplifying our finance :((.

And I just start to feel that it’s really not that easy to get rid of stuff. Accumuting them? I seem to have no problem doing that.

This article was originally written or modified on . If you enjoyed reading this post, please consider subscribing to my full RSS feed. Or you can also choose to have free daily updates delivered right to your inbox.


Author Info

This post was written by Sun You can find out more about Sun and his activities on Facebook , or follow him on Twitter .

4 Responses to “2007 4-Week T-Bill Rate Update”

  1. draino |  May 08, 2007 at 12:35 am

    I’m chasing the rates by opening an FNBO account and draining my T-bill ladder into it. We’ll see how T-bill rates are doing again in September!

  2. Sun |  May 10, 2007 at 9:15 pm

    I am considering getting an FNBO account as well. Did you have one already? How long does it take before the account is fully functional?