Vanguard, at which we have an account, says there is no fee to purchase 6 month T-bills. It seems simpler to just make the purchases through Vanguard, than to open another account at Treasury Direct. Is there a reason to use TD instead of Vanguard or Fidelity?

Vanguard, at which we have an account, says there is no fee to purchase 6 month T-bills. It seems simpler to just make the purchases through Vanguard, than to open another account at Treasury Direct. Is there a reason to use TD instead of Vanguard or Fidelity?

Assuming you qualify for free auction purchases of Treasuries (T-bills, Notes, TIPS) through Vanguard Brokerage Service, the only reason I can think of for using T-Direct is convenience/minimizing time lag, and I may be out of date on "just-in-time" transfers of cash to Vanguard.

In my experience, it has always been easy to drip money from my bank to Vanguard for fund purchases on a given date. It wasn't possible, as of a couple of years ago, to get an exact amount taken from the bank account for brokerage purchases, so it meant keeping money in a Vanguard Money Market (which paid less than my bank Money Market). Not a big deal, and I haven't checked lately whether you can now set up instant transfers without the expense of wiring money.

One definite advantage of Vanguard would be you can get paper account statements. I must say, I'm somewhat nervous about relying on print-outs for T-Direct account (especially since I'm now trying to use a perfectly good printer that is marginally compatible with my new computer).

Addendum: the 'just-in-time" issue could work the other way if you want to turn the T-bills into cash for other purchases. You'd want the cash at Vanguard and not to wait for transfer.

I don't know if you have the $250,000 for Vanguard's "Advantage" account, but I think it may allow for simple electronic transfers from a bank account (not compeltely sure if that's what is being said).

https://flagship4.vanguard.com/VGApp/hnw/content/UtilityBar/SiteHelp/FAQs/FAQVAAContent.jsp

I didn't see anything with the information of the basic brokerage account.

You would pay $45 commission if you wanted to sell securities through TD.

I've just bought some 6-month Treasury Bills through TD, and all has gone smoothly so far. However, as my HSBC Online Savings Account is now paying 4.8% with no notice for access to my money, I will probably keep other funds there.

I've just bought some 6-month Treasury Bills through TD, and all has gone smoothly so far. However, as my HSBC Online Savings Account is now paying 4.8% with no notice for access to my money, I will probably keep other funds there.

It depends on how much you value liquidity, but the Treasuries are currently trading at 5.22% APR = 5.30% APY. With 5% state tax savings, that 5.58% tax equivalent yield. Still well above savings accounts. Never know for sure what the yields will be next week though.

If you do value the liquidity alot, and you have, say $2K in your efund for each month of your goal (i.e. $12K for a 6 month efund), you could always just do $1K in T-Bills, so you split the difference.

It depends on how much you value liquidity, but the Treasuries are currently trading at 5.22% APR = 5.30% APY. With 5% state tax savings, that 5.58% tax equivalent yield.

Yes, indeed, liquidity is what I am buying by accepting a bit less from HSBC. However, I bear in mind that there could be 25 or 50 basis points added to short-term interest rates over the next 6 months. If HSBC respond - perhaps moving their rate to above 5% - then the liquidity they provide will have got cheaper, relative to Treasury Bills.

Yes, indeed, liquidity is what I am buying by accepting a bit less from HSBC.

There's liquidity and then there's liquidity. Depends on what you need the liquidity for. For an E-fund, laddering 6-month T-bills would seem good enough. For keeping reserves for a market opportunity, instant liquidity may be worth a little less yield. For cash flow during retirement, a ladder of longer maturities, if that gets you a higher yield (as it should when the yield curve isn't flat or inverted), is fine (also doubles for an E-fund, once established).

I'm now using some 6-months to even out my long term ladder (which I noticed a few months ago was uneven, because big expenditures, like summer tax bill, are uneven).

Thanks to everyone for their replies. You are all so helpful. I love being able to post a question and get thoughtful, knowledgeable answers . So unlike the BS on Yahoo boards.