Holding T-bills now pays 30x more than your bank savings account

Sharon McCutcheon/Unsplash

Six months ago, I alerted readers to the very attractive benefits that the TreasuryDirect program offers to investors who are defensively sitting on cash right now.

Since then, those benefits have continued to improve. Substantially.

Back in November, by holding extremely conservative short-term (i.e., 6-months or less) Treasury bills, TreasuryDirect participants were receiving over 16x more in interest payments vs keeping their cash in a standard bank savings account.

Today, they're now receiving over 30 times more. Without having to worry about the risk of a bank "bail-in" or failure.

So if you're holding cash right now and NOT participating in the TreasuryDirect program, do yourself a favor and read on. If you're going to pass on this opportunity, at least make it an 'eyes-wide-open' decision.

Holding Cash (In Treasurys) Now Beats The Market

There are many prudent reasons to hold cash in today's dangerously overvalued financial markets, as we've frequently touted here at PeakProsperity.com.

Well, there's now one more good reason to add to the list: holding cash in short-term Treasurys is now meeting/beating the dividend returns offered by the stock market:

"Cash Is King" Again - 3-Month Bills Yield More Than Stocks (Zero Hedge)
'Reaching for yield' just got a lot easier...
For the first time since February 2008, three-month Treasury bills now have a yield advantage over the S&P 500 dividend yield (and dramatically lower risk).
Investors can earn a guaranteed 1.90% by holding the 3-month bills or a risky 1.89% holding the S&P 500...

The longest period of financial repression in history is coming to an end...

And it would appear TINA is dead as there is now an alternative.

And when you look at the total return (dividends + appreciation) of the market since the start of 2018, stocks have returned only marginally better than 3-month Treasurys. Plus, those scant few extra S&P points have come with a LOT more risk.

Why take it under such dangerously overvalued conditions?

If You Can't Beat 'Em, Join 'Em

In my June report Less Than Zero: How The Fed Killed Saving, I explained how the Federal Reserve's policy of holding interest rates at record lows has decimated savers. Those who simply want to park money somewhere "safe" can't do so without losing money in real terms.

To drive this point home: back in November, the average interest rate being offered in a US bank savings account was an insutling 0.06%. Six months later, nothing has changed:

(Source

That's virtually the same as getting paid 0%. But it's actually worse than that, because once you take inflation into account, the real return on your savings is markedly negative.

And to really get your blood boiling, note that the Federal Reserve has rasied the federal funds rate it pays banks from 1.16% in November to 1.69% in April. Banks are now making nearly 50% more money on the excess reserves they park at the Fed -- but are they passing any of that free profit along to their depositors? No....

This is why knowing about the TreasuryDirect program is so important. It's a way for individual investors savvy enough to understand the game being played to bend some of its rules to their favor and limit the damage they suffer.

Below is an updated version (using today's rates) of my recap of TreasuryDirect, which enables you to get over 30x more interest on your cash savings than your bank will pay you, with lower risk.

TreasuryDirect

For those not already familiar with it, TreasuryDirect is a service offered by the United States Department of the Treasury that allows individual investors to purchase Treasury securities such as T-Bills, notes and bonds directly from the U.S. government.

You purchase these Treasury securities by linking a TreasuryDirect account to your personal bank account. Once linked, you use your cash savings to purchase T-bills, etc from the US Treasury. When the Treasury securities you've purchased mature or are sold, the proceeds are deposited back into your bank account.

So why buy Treasuries rather than keep your cash savings in a bank? Two main reasons:

  • Much higher return: T-Bills are currently offering an annualized return rate between 1.66-2.04%. Notes and bonds, depending on their duration, are currently offering between 2.6% - 3.1%
  • Extremely low risk: Your bank can change the interest rate on your savings account at any time -- with Treasury bills, your rate of return is locked in at purchase. Funds in a bank are subject to risks such as a bank bail-in or the insolvency of the FDIC depositor protection program -- while at TreasuryDirect, your funds are being held with the US Treasury, the institution with the lowest default risk in the country for reasons I'll explain more in a moment.

Let's look at a quick example. If you parked $100,000 in the average bank savings account for a full year, you would earn $60 in interest. Let's compare this to the current lowest-yielding TreasuryDirect option: continuously rolling that same $100,000 into 4-week T-Bills for a year:

  1. Day 1: Funds are transferred from your bank account to TreasuryDirect to purchase $100,000 face value of 4-week T-Bills at auction yielding 1.68%
  2. Day 28: the T-Bills mature and the Treasury holds the full $100,000 proceeds in your TreasuryDirect account. Since you've set up the auto-reinvestment option, TreasuryDirect then purchases another $100,000 face value of 4-week T-Bills at the next auction.
  3. Days 29-364: the process repeats every 4 weeks
  4. Day 365: assuming the average yield for T-Bills remained at 1.68%, you will have received $1,680 in interest in total throughout the year from the US Treasury.

$1,680 vs $60. That's a 27x difference in return.

And the comparison only improves if you decide to purchase longer duration (13-week or 26-week) bills instead of the 4-week ones:

Repeating the above example for a year using 13-week bills would yield $1,925. Using 26-week bills would yield $2,085. A lot better (34x better!) than $60.

Opportunity Cost & Default Risk

So what are the downsides to using TreasuryDirect? There aren't many.

The biggest one is opportunity cost. While your money is being held in a T-Bill, it's tied up at the US Treasury. If you suddenly need access to those funds, you have to wait until the bill matures.

But T-Bill durations are short. 4 weeks is not a lot of time to have to wait. (If you think the probability is high you may to need to pull money out of savings sooner than that, you shouldn't be considering the TreasuryDirect program.)

Other than that, TreasuryDirect offers an appealing reduction in risk.

If your bank suddenly closes due to a failure, any funds invested in TreasuryDirect are not in your bank account, so are not subject to being confiscated in a bail-in.

Instead, your money is held as a T-Bill, note or bond, which is essentially an obligation of the US Treasury to pay you in full for the face amount. The US Treasury is the single last entity in the country (and quite possibly, the world) that will ever default on its obligations. Why? Because Treasurys are the mechanism by which money is created in the US. Chapter 8 from The Crash Course explains:

As a result, to preserve its ability to print the money it needs to function, the US government will bring its full force and backing to bear in order to ensure confidence in the market for Treasurys.

Meaning: the US government won't squelch on paying you back the money you lent it. If required, it will just print the money it needs to repay you.

So, How To Get Started?

Usage of TreasuryDirect is quite low among investors today. Many are unaware of the program. Others simply haven't tried it out.

And let's be real: it's crazy that we live in a world where a 1.68-2.09% return now qualifies as an exceptionally high yield on savings. A lot of folks just can't get motivated to take action by rates that low. But that doesn't mean that they shouldn't -- money left on the table is money forfeited.

So, if you're interested in learning more about the TreasuryDirect program, start by visiting their website. Like everything operated by the government, it's pretty 'no frills'; but their FAQ page addresses investors' most common questions.

Before you decide whether or not to fund an account there, be sure to discuss the decision with your professional financial advisor to make sure it fits well with your personal financial situation and goals. (If you're having difficulty finding a good one, consider scheduling a free discussion with PeakProsperity.com's endorsed financial advisor -- who has considerable experience managing TreasuryDirect purchases for many of its clients).

In Part 2: A Primer On How To Use TreasuryDirect, we lay out the step-by-step process for opening, funding and transacting within a TreasuryDirect account. We've created it to be a helpful resource for those self-directed individuals potentially interested in increasing their return on their cash savings in this manner.

Yes, we savers are getting completely abused by our government's policies. So there's some poetic justice in using the government's own financing instruments to slightly lessen the sting of the whip.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

NOTE: PeakProsperity.com does not have any business relationship with the TreasuryDirect program. Nor is anything in the article above to be taken as an offer of personal financial advice. As mentioned, discuss any decision to participate in TreasuryDirect with your professional financial advisor before taking action.

The Democrats are turning on Biden

Mario Tama / Staff | Getty Images

The election is over, Kamala Harris has officially conceded, and now the Democrats are doing some serious soul-searching.

After reflecting long and hard (approximately 24 hours), the Democrats have discovered the real reason Harris lost the election. Was it Trump's excellent campaign that resonated with voters? Was it Harris's off-putting personality? Or was it her failure to distinguish herself from the Biden administration's failed policies?

No, it was Joe Biden. All the blame lies on President Biden's shoulders. The Left sees no need to take any real responsibility for the landslide defeat the Democrats suffered earlier this week; just pass the blame on to 'ole Joe.

Here are the leading excuses the Left is spinning up to explain Harris's crushing defeat:

"Biden should have dropped out sooner."

Kevin Dietsch / Staff | Getty Images

This is the crux of the left-wing media's argument against Biden. They claim that if Joe Biden had dropped out earlier, Harris would have had more time to campaign and would not have had to carry around the baggage of Biden's abysmal debate performance. This could make sense, but what these commentators are conveniently forgetting are the years of propaganda these very same people promoted arguing that Biden's declining mental acuity was nothing more than a right-wing conspiracy theory. If Biden had been as sharp as they had told us, why would he have dropped out?

Also, if a lack of time was Harris's biggest issue this election, she sure didn't act like it. She was practically in hiding for the first several weeks of her campaign and she took plenty of days off, including during the last few crucial weeks. More time wouldn't have helped her case.

"Harris failed to distance herself from Biden."

Kevin Dietsch / Staff | Getty Images

This is media gaslighting at its finest. Yes, Harris failed to distance herself from Biden. However, that's because she, along with the rest of the Left, publically went on record defending Biden's policies and his mental acuity. By the time Harris became the nominee, she had already said too much in favor of Biden. Don't forget Harris's infamous “There is not a thing that comes to mind,” quote after being asked on The View if she would do anything differently than Biden. In a way, Harris couldn't separate herself from Biden without drawing attention to the greatest flaw in her campaign: if she knew how to fix the country, why hasn't she?

"Harris did the best anyone could have done in that situation."

Brandon Bell / Staff | Getty Images

But did she really? As mentioned earlier, she was noticeably absent for much of the campaign. While Trump was busy jumping into interviews, events, and rallies non-stop, Harris was MIA. Whenever Harris did manage to make an appearance, it almost always did more harm than good by highlighting her lack of a robust policy platform and her inability to string together a coherent sentence. Notable examples include her aforementioned appearance on The View and her disastrous interview on Fox News with Bret Baier. The point is, even considering the limited time to campaign she had, Kamala Harris wasnot the best person for the job and there are undoubtedly many other Democrats who would have run a much more successful campaign.

Glenn: I'm filled with hope. And you should be, too.

Chip Somodevilla / Staff | Getty Images

The election was a major blow to draconian globalist organizations. Now, we could have a true rebirth of freedom and the American dream.

Millions of people around the world were holding their breath on election night. I've talked to Europeans to try to get a bead on what’s happening over there. There are Europeans like you and me who are frustrated with their own globalist, tyrannical bureaucracies telling them how to live and what to believe. If Donald Trump didn’t win, where in the world would they look to for hope that this madness would stop? Which leader could they count on to stand in the gap against their globalist elites? They, too, had a lot on the line in our election last night.

But today brings hope, not only in America but for freedom-loving people worldwide.

We need to restore the balance of power in the federal government — the way America’s founders intended.

We know Trump is going to stop the madness at the southern border. He is going to deport serial criminals and sex offenders who entered our country under Biden and Harris' watch. The media will try to convince you that deportations are something akin to Hitler, but they turn a blind eye to their Democratic predecessors who have deported even more illegal immigrants than Trump. In fact, Bill Clinton deported more illegal immigrants than any president in U.S. history, shipping 11 million out of the country in the 1990s. In contrast, Trump deported less than a million during his first term, which is even less than the 1.8 million under the Obama administration.

Deportations of criminals who are in our country illegally is critical to protecting the safety of the American people, a practice that has been exercised by presidents for decades.

Our friends across the pond have been witnessing the destruction of their societies since EU globalists opened Europe's floodgates to immigrants in 2015. Crime is rampant, communities governed by Sharia law are multiplying, and their social programs are being pushed to a breaking point. Tuesday night gave them reason to hope. America is going to say, "No more," and perhaps this will be the rallying cry for our European brothers-in-arms to stand up as well.

The election was also a major blow to draconian globalist organizations. The United States will no longer be beholden to the Paris Climate Accords. Our nation will no longer give credence to the World Economic Forum. We won’t give the World Health Organization a single penny more. All these very well-planned globalist initiatives are going away.

But Trump can't act alone. Thank God we won the Senate. This is an incredible step forward, but for these big plans to come to fruition, we need the House. If the Republicans — actual freedom-loving, Constitution-abiding Republicans don't have the House, you’re not going to be able to get things done except by executive order, which we don’t want to do. One reason things were so bad during the last four years is that Joe Biden simply signed executive orders to reverse everything that Trump accomplished, completely bypassing Congress. We have to do it the right way. We need to restore the balance of power in the federal government the way America’s founders intended.

One of the most hopeful things Trump said Tuesday night is that we’re going to enter a new golden era in America. I believe him. He could have said that in 2020, and I wouldn't have believed him as much as I believe him now. That’s because Trump now has a team of people that's not exclusively comprised of politicians.

Bringing in somebody like Elon Musk is one of the most hopeful things for our country I've witnessed in my lifetime. I know that guy can cut spending. I know he will find the waste in our government because he's not a government guy he's a businessman. He's going to slash all the redundancies that have been justified by career bureaucrats for decades. We have a chance of cutting our budget and creating a reasonable one.

Trump’s promise to cut regulations also spells hope for our country. He cut more regulation in his first term than any other president, but Biden and Harris have since added a mountain of rules. He will have his work cut out for him, but he will get it done. He must if this economy will roar again.

We could have a true rebirth of freedom and the American dream, and I find that really hopeful. So many Americans are tired of worrying about their kids struggling and seeing Bidenomics and regulation yank from their children's hands the possibility of the American dream that they attained. Donald Trump is the biggest chance of bringing it back.

Today, I’m filled with hope. Real, tangible hope. And you should be, too.

Editor's Note: This article was originally published on TheBlaze.com.

TOP FIVE liberal meltdowns to Trump's victory

MANDEL NGAN / Contributor | Getty Images

Conservatives are celebrating Donald Trump's election for what feels like the first major conservative victory over the past four years. But how are our liberal friends holding up? Has anyone checked on them recently?

Some of them aren't doing too well, and quite a few have an inexplicable desire to share their anguish with the world on social media. We've waded through a torrent of liberal tears to bring you the top FIVE best responses to Donald Trump's 2024 victory:

The Car Screamer

This first one is in a category we've dubbed, the "Screamers." These include people who have been so overcome with rage that they have lost the ability to communicate with words. Instead, they revert to a more primitive form of communication, usually composed of some combination of screams, shrieks, sobs, and wild gesticulations. There are dozens of "Screamer" videos across the internet, but this one takes the cake for the most animated and over-the-top.

Sunny Hostin's Meltdown

Just to prove that the daytime talk show "The View" is completely out of touch, host Sunny Hostin tried to rationalize Trump's victory using identity politics. Hostin dismissed the idea that Harris lost due to her less popular policy and instead suggested it was because of her race and gender along with the religion of her husband. She clearly forgot about JD Vance and his mixed-race family.

CNN Watches the Election Crumble Around Them

In this clip, you can actually hear the defeat setting in as the CNN host realizes that Kamala Harris is losing. When asked to see a map of the counties where Harris was over-preforming Joe Biden in 2020, Jake Tapper was flabbergasted when the map came up blank.

The Calm Coper

At least this guy isn't screaming. Instead, he regurgitates the lies and propaganda fed to him by the media with a strangely robotic cadence. He's trying to project calm intelligence, but all he is really doing is coping and seething.

The Screamer Compilation 

Just in case you didn't get enough of, the "Screamers," here is a handy compilation that perfectly sums up the liberal response to Trump's victory.

Biggest takeaways from Trump's HISTORIC election

John Moore / Staff | Getty Images

"Too big to rig" was the 2024 Trump strategy, and it was proven true on election day.

President Trump declared victory early in the morning on Wednesday, November 6, 2024, after securing the required 270 electoral college votes, marking an exciting end to a historic campaign. Since then, more electoral college votes have trickled in for Trump and he has secured 51 percent of the popular vote. There is no space for the Democrats to contest his election.

Trump's victory is just the beginning! Here are the top takeaways from election night:

Trump sweeps the swing states

Andrew Lichtenstein / Contributor | Getty Images

Seven swing states were poised to make or break the election: Pennsylvania, Wisconsin, Michigan, Georgia, North Carolina, Arizona, and Nevada. At the time of this article's publication, Trump had won Pennsylvania, Wisconsin, Georgia, Michigan, and North Carolina and was poised to win Arizona and Nevada in what could be a total sweep of the swing states. The "swing state sweep" is a stunning victory for Trump.

The GOP takes the Senate

TIMOTHY A. CLARY / Contributor | Getty Images

The presidential race wasn't the only important election yesterday. Approximately one-third of the Senate was up for re-election. At the time of this article's publication, Republicans had officially clinched a majority in the Senate, flipping three seats from the Democrats in Montana, Ohio, and West Virginia, giving the GOP 52 of the 100 Senate seats. In addition, Republicans are poised to win a seat in Pennsylvania and Nevada, which would further cement their lead.

Republicans lead in the House

Bloomberg / Contributor | Getty Images

Seats in the House of Representatives were also up for grabs as Republicans fought to keep control of the House. The race is currently too close to call, but at the moment, the GOP is holding the lead with 201 seats — only 17 seats away from a majority. This means there is a real possibility that the White House, the House of Representatives, and the Senate could all be held by Republicans.