The Big Fat Check is Here and My Spending Plan is

1. Boost my 4-week T-bill purchases from $12,000 a month to $24,000 a month.

The latest T-bill rate (March 1, 2007) is 5.267% APR, equivalent to a 5.40% APY. Considering that the interests earned from T-bill investment are exempted from state income taxes, the effective annual yield is as high as 5.77%, a rate that no bank can beat as far as I know. Of course, T-bill rates fluctuate from week to week and there’s no guarantee the rates in the coming weeks, months will be at this level. Looking back to the second half of 2006, the average rate indicates 4-week T-bill is still a solid short-term investment choice, if not the best (here are some steps to invest in T-bills if you are interested in). Besides, the money is locked for only four weeks and in the event that the rate all the sudden becomes unfavorable, cancelling any pending purchase only takes a couple of minutes.

The other choice is to simply put the money in high yield online savings account. Currently, the highest paying savings account I have is with IGoBanking at 5.30% APY. The rate is decent, but the problem I have with this account is it has a monthly transfer-out limit of $25,000. Anything above the limit needs another month according to the rule and I already have a big chunk with them. Going with T-bill may let me earn a higher rate and I can get a quarter of my investments back every week if I need the money instead of having to wait a full month.

2. Invest the rest, but where?

I don’t have a clear choice of where to invest the rest since I haven’t really followed stocks for quite a well, but I do like to have a chance to earn above the fixed amount from the banks and bills. What I have in my mind is to get some shares of XFML, the Chinese IPO that’s scheduled to debut next week (there are speculations the IPO may be called off as last week’s Chinese stocks sell-off may reduce investors enthusiasm of the stock). But with stocks, there’s always the possibility of ending up losing money. My last Chinese IPO bet (GRRF) so far has brought me nothing but a loss of nearly 50% value, :((.

Oh, by the way, the big fat check I am talking about is the $18,500 0% balance transfer check from Citi PremierPass card.

Free $18,500 loan for a year, what’s not to love?

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