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.

Hey Joe, THIS is how you handle terrorists

Wikimedia Commons

If you haven't seen the new Apple TV+ drama Tehran, it's definitely worth your time. It tells the story of an Israeli spy who sneaks into Iran to set up an attack on Iran's nuclear program. Now that the new Bond movie is delayed, this show has a little bit of everything to hold you over: international spies, hackers, double agents.

But I digress...

No matter how Hollywood tries to invent these stories — and this one is definitely good — they always fall short of what happens in real life. What happened in Iran this past Friday is a movie waiting to happen.

What happened in Iran this past Friday is a movie waiting to happen.

Iran's top nuclear scientist, Mohsen Fakhrizadeh, was assassinated as he was traveling to his private villa just a few miles east of Tehran. The operation involved a team of over 60 people. Around 50 logistical support agents backed up a dozen gunmen. They knew everything. His schedule, his private address, his classified movements, the route...

Fakhrizadeh was traveling in the middle of three armored vehicles. When they approached the ambush site, the hit team cut off all the electricity in the surrounding area. A car bomb was then remotely detonated, taking out the rear vehicle in the convoy. 12 gunmen proceeded to open fire on the other two cars. Iran's top nuclear scientist was dead, and NONE of the hit squad were wounded or arrested.

Now you can already guess where the blame is being directed this morning. Almost immediately, the fingers began to point at both Israel and the United States. The mainstream media is trying to paint this as an effort by Trump to sabotage a Biden effort to restart the Iran Nuclear Deal. Remember that "masterful" stroke of Middle East foreign policy? You know, the deal that included $150 BILLION — in cash — that Obama and Biden knew would be used to kill Americans and destabilize the entire region. Remember that?

They said it was impossible... but Trump did it.

They claimed their way was the only path to peace. What did they get from it? Iran spread out all the way to the literal doorstep of Israel. The elite Iraqi troops of the Republican Guard were staging in Syria, plotting that ultimate attack to take back Jerusalem. The entire region was set to explode... but then Trump scuttled the deal. What did it lead to? Historic peace agreements between the Arab world and Israel.

They said it was impossible... but Trump did it. He reimposed sanctions and launched a campaign to kill terrorists rather than give them money.

John Brennan took to Twitter this weekend to call the assassination a criminal act.

It echoes what they said when the top terrorist in the world — Qassem Soleimani — was assassinated in Iraq. Coincidentally, the Iranian government published artwork over the weekend depicting Soleimani and the, now dead, nuclear scientist standing side by side.

You see, now matter how people like Brennan and Biden might try and say otherwise, this is exactly the type of person Iran's "Robert Openheimer" was: a terrorist in the same category as Soleimani (but obviously with a lot more dangerous capability).

Iran has been protecting this man for two decades. They called him merely "an academic," but denied the UN IAEA inspectors to ever question him.

The rhetoric Iran fed the global community was that their nuclear program didn't have anything to do with weapons, and that this nuclear scientist was involved in research to improve their energy programs. But in 2007, the CIA said this was a cover story. In 2008, the United States froze his assets, and the IAEA made it public that this scientist was leading Iran's nuclear weapons project.

Iran called it "Projects 110 and 111." Fakhrizadeh was tasked with finding out how to miniaturize a nuclear warhead and make it durable enough so that it could survive re-entry into the atmosphere on top of an ICBM.

There can be no accommodation with terrorists.

Obama and Biden's nuclear deal didn't stop ANY of this. Israel revealed in 2018 that Projects 110 and 111 continued. Fakhrizadeh was specifically called out as still being the main man in charge.

Biden thinks his policy of accommodation will somehow bring us the peace that Neville Chamberlain once thought was possible with Hitler. When has this borne fruit with any maniacal tyrant or terrorist... ever?!

And that's exactly what Iran and their thugs are. They're terrorists! They're not a legitimate regime. Long before ISIS, the terrorists in Iran stole a country, planning to spread their caliphate all over the world. Members of Al Qaeda, despite being Sunni, enjoy free sanctuary under their protection. They want to burn Israel to the ground. They chant "death to America"... It's actually a holiday there.

There can be no accommodation with terrorists. Biden wants peace with Iran, and he'll probably roll out a red carpet and offer them a few hundred billion more dollars. We know this doesn't work. To quote Reagan, "there's one way to have peace and you can have it in this second... surrender."

That's how you deal with terrorists, and — whether we were involved or not — another one was just taken out.

How does a sports writer know how to fix America, and America's racial dilemma?

In a special edition of the "Glenn Beck Radio Program," Outkick sports columnist Jason Whitlock filled in Tuesday for Glenn to explain how we can bring America back together, lean into racial harmony, and restore the values of our Founding Fathers. Because if not us, then who will?

Jason started out by explaining how, during a recent appearance on the program, he felt a spiritual connection with Glenn, regardless of physical differences, as both share a common passion for God and country.

"Glenn and I share a kindred spirit. A kindred passion," Jason said. "We have two things that we love and are passionate about: God and country. I am not a minister. I'm a flawed sinner just like Glenn and just like you. But I am a believer. Believers share an energy that connects them, that cuts through our physical differences and makes those differences irrelevant relevant. That's what I felt when I met Glenn, an energy and a spirit that connects us. We are broadcasters, media personalities, operating in separate spaces, trying to talk to Americans, who share our passion."

Jason went on to say that he believes there are forces operating, both outside of and inside America, that are working to separate America from God, and that much of what we've witnessed in 2020 — from the racial division stirred by the mainstream and social media, to the rioting and looting by Antifa and Black Lives Matter, to the "remaking of the sports world into a shrine that celebrates resisting criminal suspects and denigrates this great country at every turn" — are symptoms and consequences of America's enemies separating God and country.

"We are one nation under God. We are nothing without Him," Jason continued. "The flawed sinners who founded this nation baked God into this country with their Declaration of Independence. We hold these truths to be self-evident, that all men are created equal. That they are endowed by their creator with certain unalienable rights. That among those, are life, liberty, and the pursuit of happiness. The foreign and domestic enemies of this nation are baking a new American cake. God isn't an essential ingredient in this new cake. He isn't an ingredient at all. The removal of faith is sewing the disharmony that is terrorizing and destroying the United States of America.

"Why am I here today? I'm here to tell you how we take our country back, how we restore the freedoms and the liberties our enemies seek to remove in their remaking of a godless America."

Watch the video below to hear more from Jason Whitlock:

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

Subscribe to BlazeTV today with our BEST DEAL EVER for $30 off with promo code GLENN.

One of the most shocking things British journalist, political commentator, and author of "The Madness of Crowds," Douglas Murray witnessed during his recent stay in America, was how many Americans are acting as if they live in 1930s Germany or behind the Iron Curtain, afraid to stand up and speak out because they're afraid of the consequences.

Murray joined the "Glenn Beck Podcast" this week to explain why he believes the state of America is actually worse than we realize, and how the Left's obsession with rewriting history has ushered in guilt, fear, and a "silent majority."

Murray said he's particularly "fed up" with those on the Right who are afraid to voice their opinion because they don't want to become the target of leftist mobs on social media.

"Do you think anyone in history who told the truth had an easy time? You've got the easiest time that any opposition movement ever did in history," Murray said.

"You cannot have these people in America living in a free society — which is for the time being free — pretending that they live under the circumstances of Jews in 1930s Germany," he added. "Speak up. Speak out. Don't be a silent majority; be a very damn noisy majority. And don't put up with the oppression of people who are totally insincere ... they want to make money. They want to win. Nothing more. Call them out ... and get back to what you should be doing as a nation."

Watch the full interview with Douglas Murray below:



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Subscribe to Glenn Beck's channel on YouTube for FREE access to more of his masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, or subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

New York City shut down its schools over the coronavirus with barely any notice. But even before that, Governor Andrew Cuomo apparently wasn't in the mood to be asked about it, and he made that very clear to reporters.

Asked on Wednesday whether parents could expect schools to be closed as soon as Thursday, Cuomo mocked reporters for their "obnoxious and offensive" questions and accused them of not paying attention. Watch the testy exchange for yourself here.

On Thursday's radio program, Glenn Beck and producer Stu Burguiere had plenty to say about Stu's least favorite governor and the decision to close schools. But Glenn also offered his own theory on why coronavirus restrictions have become so political: Americans refuse to be forced into submission.

Watch the video below to catch the conversation:

Want more from Glenn Beck?

To enjoy more of Glenn's masterful storytelling, thought-provoking analysis and uncanny ability to make sense of the chaos, subscribe to BlazeTV — the largest multi-platform network of voices who love America, defend the Constitution and live the American dream.

Subscribe to BlazeTV today with our BEST DEAL EVER for $30 off with promo code GLENN.