Personal Investments • Bank’s savings account vs. US treasuries

The question is what liquidity events you need that can't be bridged by a credit card for 30 days. On the other hand, your yield for VUSXX is 5.29% and the most recent four week rate is 5.395%. The difference is $1 per $1000, over the span of a year. In the period of quantitative easing, VUSXX was paying 0.01% while Treasuries were paying 0.03% to 0.10%, meanwhile even Ally was paying 0.50%. Now Ally is paying 4.35%, a good percentage point off the highest saving account yields and Treasuries. I think for simplicity's sake, go with a good savings account when rates are low, and switch to a money market fund when rates are higher.

Over the past year and some, I've been trying to pay attention to how the VUSXX (and BIL and BILS and SGOV) rates differ from what I see in my T-bill ladder. At this point I suspect that any delta in rates is entirely due to a combination of reporting lag, which causes me to know current info for my T-bill ladder and old info for the MMF and ETFs, plus portfolio composure, where I'm buying a specific T-bill at auction and getting a specific yield, while the various funds hold an aggregate of different maturities. If so, that would imply that I'm adding basically zero value while exerting non-zero effort to do it!

Even if I grant myself a bit of win on the subject, I doubt I'm earning myself more than a basis point or three. Even if I was managing millions of dollars, I'd only be earning myself hundreds of dollars of advantage. So IMHO it's not worth the squeeze unless you simply enjoy learning the process.

Statistics: Posted by shess — Mon Feb 26, 2024 3:23 pm — Replies 25 — Views 2345

---