6. How to buy treasurys without paying a commission

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Money Magazine staff

When you're buying supersafe T-bills, notes and bonds, why fork over fees that will eat away at already slim returns? Go to treasurydirect.gov and follow the directions for opening an account. You'll need to let the Treasury link to your bank account, so keep your bank info handy.

Once you're authenticated (usually a few minutes later), you'll be able to bid in auctions for Treasury bills, notes, bonds and TIPS (Treasury Inflation- Protected Securities). Sound intimidating? It's not.

"The big players end up setting the price," explains Stephen Meyerhardt of the Bureau of the Public Debt, an agency within the U.S. Treasury. All you do is submit what's known as a noncompetitive bid, and you'll get the same price that banks and brokers do.

Let's say you want to buy $10,000 worth of a 26-week T-bill. You'll see at the Web site that these bills are auctioned every Monday (except holidays).

Before the auction, place a bid online. After the auction, your bid will be accepted, and the Treasury will draw the money from your bank account. (It will draw less than $10,000; the exact amount depends on what the auction price is.)

And when the bill matures 182 days later? The Treasury returns the full face value of $10,000 (which includes the interest you earned) to your account automatically. --E.F.K.

(Home)

Send feedback to Money Magazine

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.