Where to buy T-Bill; Treasury Direct or Fidelity?

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darkarma
Posts: 2
Joined: Wed Jun 22, 2022 2:10 am

Where to buy T-Bill; Treasury Direct or Fidelity?

Post by darkarma »

Hi All,

Where would be the best place to by T-bills/notes/bonds
a. Treasury Direct (TD) or
b. Fidelity/Any Brokerage

I have an account with Fidelity and I like their auto roll feature for treasuries. I have a TD account and buy I-Bonds directly

The issue is my account at Fidelity is over the SIPC insurance limit. Though the chances of Fidelity going bust is low, still anything can happen.

So directly with TD would be safest from the aforementioned point, but selling those T-bills is a hassle since one needs to wait till maturity or transfer to a brokerage to be sold on the secondary market.

So what would be the best option in your opinion.

Thanks everyone for contributing.
P.S. also what is the chance of these big brokerages such as Fidelity/Vanguard going bankrupt and you have securities above the SIPC limit?
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Oak&Elm
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by Oak&Elm »

I'm going through the same dilemma. I know a lot of people here have had issues with TD but my experience (other than initial account opening) has been great so far. I bought a 4 week tbill from TD to see how it works and it could not of been any easier. Here are my pros/cons
TD
Pros-
*buy in increments of $100
*can place order well in advance
*easy to turn on or off auto roll (I think, haven't tried)
Cons-
*heard they are slow in getting your tax info ready
*you have to remember to login and get your tax docs

Fidelity-
Pros-
*easy to buy and set up auto roll
*tax info included with other invstments
Cons-
*auto roll is a bit tricky to turn off
*have to buy in increments of $1,000
*can only place order a couple days in advance

as they say, six of one, half dozen of another
Call_Me_Op
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by Call_Me_Op »

Advantage of holding at Fidelity is you can easily sell and use proceeds to buy something else if you wish.
Best regards, -Op | | "In the middle of difficulty lies opportunity." Einstein
ModifiedDuration
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by ModifiedDuration »

Call_Me_Op wrote: Wed Jun 22, 2022 6:44 am Advantage of holding at Fidelity is you can easily sell and use proceeds to buy something else if you wish.
This. Exactly.

You cannot sell on Treasury Direct. If you want to sell Treasuries held at Treasury Direct, you would have to first transfer the Treasuries to a broker, which may be a cumbersome process (as has been reported on the Forum).
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Tubes
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by Tubes »

Call_Me_Op wrote: Wed Jun 22, 2022 6:44 am Advantage of holding at Fidelity is you can easily sell and use proceeds to buy something else if you wish.
Yes. Any bond or bill on Treasury Direct has to be transferred to a brokerage to sell.

Another advantage to Fidelity (or Vanguard) is that their websites are miles ahead of Treasury Direct. Yes, even Vanguard's site is better than TD.
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AnnetteLouisan
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by AnnetteLouisan »

I can recommend TD. I bought some short term treasuries on auto roll on treasury direct (non competitive auction). I’m pretty happy with it. It’s safe and I only buy the duration and roll period that I need, so selling isn’t an issue for me. I also feel like, since I have set up the account for I bonds, and it’s a totally free platform, and no fee investment, may as well use it for a few things Id do anyway. They deposit interest into my savings account, which makes up for the lack of bank interest. It’s not the fanciest user interface but I like the idea of having more than just I bonds in that account. And as others mentioned you don’t have to use up your SIPC protected space.

I haven’t bought treasuries in Fidelity except for SPAXX (govt money market core fund) and Fidelity has been quite easy to use (thanks again to the Bogleheads who recommended it). Probably whichever you decide is fine.
ModifiedDuration
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by ModifiedDuration »

Investor securities held at a firm like Fidelity are segregated and protected from bankruptcy.

SIPC provides protection from theft or fraud.

It is well worth reading the attached from the Financial Industry Regulatory Authority (FINRA) to obtain a better understanding of how your assets are being held and the protections that you have:

https://www.finra.org/investors/alerts/ ... -its-doors
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Svensk Anga
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by Svensk Anga »

Since SPIC protection limits are an issue for the OP, why not move funds to another broker, perhaps grabbing a transfer bonus in the process?

I would want to have the ability to sell as needed, so TD is a no for me.
noriskfinance
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Joined: Wed Jun 10, 2020 6:54 am

Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by noriskfinance »

Never bought treasuries before. A very basic question:

How do I buy treasuries? I am using etrade. This is what my reading taught me. I went under bonds and looked for treasuries. I see interest rates from 3months to 20 years. simple until this point. When I clicked on 2 year option--3.2% I got presented multiple options to buy. They all had slightly varying degree of YTM, between 3.05 to 3.09. All had same "Min" and most had a "Qty" of 5000 with 3 out of 13 options had a Qty of 10K, 35K, and 20K. This is where i got lost.
evelynmanley
Posts: 415
Joined: Tue Sep 21, 2010 9:13 am

Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by evelynmanley »

noriskfinance wrote: Wed Jun 22, 2022 9:02 am Never bought treasuries before. A very basic question:

How do I buy treasuries? I am using etrade. This is what my reading taught me. I went under bonds and looked for treasuries. I see interest rates from 3months to 20 years. simple until this point. When I clicked on 2 year option--3.2% I got presented multiple options to buy. They all had slightly varying degree of YTM, between 3.05 to 3.09. All had same "Min" and most had a "Qty" of 5000 with 3 out of 13 options had a Qty of 10K, 35K, and 20K. This is where i got lost.
Some of your questions are addressed in this thread when I was buying T-bills for the first time. Several Bogleheads walked me through it, especially Kevin M.

viewtopic.php?p=6662541#p6662541

Another good thread about buying Treasuries, which also includes discussion about TIPS:

viewtopic.php?p=6737827#p6737827

How to buy Treasuries with online brokers:
https://thefinancebuff.com/treasury-bil ... arket.html
evelynmanley
Posts: 415
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by evelynmanley »

ModifiedDuration wrote: Wed Jun 22, 2022 7:05 am
Call_Me_Op wrote: Wed Jun 22, 2022 6:44 am Advantage of holding at Fidelity is you can easily sell and use proceeds to buy something else if you wish.
This. Exactly.

You cannot sell on Treasury Direct. If you want to sell Treasuries held at Treasury Direct, you would have to first transfer the Treasuries to a broker, which may be a cumbersome process (as has been reported on the Forum).
Definitely a PITA to transfer funds from TD to a broker:

https://www.savingsbonds.gov/indiv/rese ... l_sell.htm

<<You can hold Treasury bills until they mature or sell them before they mature.

To sell a bill you hold in TreasuryDirect or Legacy Treasury Direct, first transfer the bill to a bank, broker, or dealer, then ask the bank, broker, or dealer to sell the bill for you.

How you transfer a bill to a bank, broker, or dealer depends on whether you hold the bill in TreasuryDirect or Legacy Treasury Direct.

For a bill held in TreasuryDirect:

Go to "Manage Direct"
Choose "Transfer securities"
Identify the bill or bills you want to transfer
Choose "External Transfer"
Click the link for FS Form 5511,"TreasuryDirect Transfer Request"
Complete FS Form 5511 and mail it as directed on the form

For a bill held in Legacy Treasury Direct, complete "Security Transfer Request"
(FS Form 5179) and mail it as directed on the form.>>

Form 5511: https://www.savingsbonds.gov/instit/for ... RNTIPS.htm

<<The account owner or account manager must appear before and establish identification to the satisfaction of an authorized certifying officer and sign the application in the officer's presence. The officer must then complete the certification form provided and imprint the seal or stamp required in certifying requests. For certifications within the United States, the certifying officer must be authorized to bind his or her institution by his or her acts and guarantee signatures to assignments of securities or certify assignments of securities. Certification by a notary isn’t acceptable.<<

Once you fill out Form 5511 and have it signed, you mail it back to TD.
JayB
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Joined: Sat May 28, 2022 9:57 am

Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by JayB »

darkarma wrote: Wed Jun 22, 2022 2:20 am The issue is my account at Fidelity is over the SIPC insurance limit. Though the chances of Fidelity going bust is low, still anything can happen.
Given how SIPC operates and the steps Fidelity takes to protect accounts, I wouldn't be concerned. In excess of the SIPC limit, Fidelity employs a second layer of protection for an additional $ billion in aggregate across all brokerage account holders. Also, I believe that the SIPC limit applies separately to each type of account and registration (e.g., IRA, Roth IRA, 401(k), 403(b), inherited IRA, singly held, jointly held, etc.). You might want to call Fidelity to discuss the layers and details of the protections available. And perhaps take a look at their brokerage account protection at: https://www.mybrokerageinfo.com/safegua ... r-accounts
Topic Author
darkarma
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Joined: Wed Jun 22, 2022 2:10 am

Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by darkarma »

Call_Me_Op wrote: Wed Jun 22, 2022 6:44 am Advantage of holding at Fidelity is you can easily sell and use proceeds to buy something else if you wish.
Exactly, that’s why I don’t hold any T-Bill/Notes/Bonds in TD

It’s a PITA to transfer them. At any brokerage it is as simple as clicking ‘Sell’

In TD I hold savings bods as per allowable limit per year

Thanks for your post
MikeG62
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by MikeG62 »

Tubes wrote: Wed Jun 22, 2022 7:10 am
Call_Me_Op wrote: Wed Jun 22, 2022 6:44 am Advantage of holding at Fidelity is you can easily sell and use proceeds to buy something else if you wish.
Yes. Any bond or bill on Treasury Direct has to be transferred to a brokerage to sell.

Another advantage to Fidelity (or Vanguard) is that their websites are miles ahead of Treasury Direct. Yes, even Vanguard's site is better than TD.
^This.

I own I Bonds at TD and otherwise all my Treasuries at Fidelity (or other brokers).
Real Knowledge Comes Only From Experience
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AnnetteLouisan
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Location: New York, NY

Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by AnnetteLouisan »

Is the cost of buying a one year treasury for example the same buying on Fidelity vs TD? I thought TD has no fees whatsoever.
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anon_investor
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Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by anon_investor »

AnnetteLouisan wrote: Sat Jun 25, 2022 6:06 pm Is the cost of buying a one year treasury for example the same buying on Fidelity vs TD? I thought TD has no fees whatsoever.
Neither charges a fee.
JIMX7
Posts: 53
Joined: Fri Sep 10, 2021 11:36 am

Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by JIMX7 »

evelynmanley wrote: Wed Jun 22, 2022 10:26 am
ModifiedDuration wrote: Wed Jun 22, 2022 7:05 am
Call_Me_Op wrote: Wed Jun 22, 2022 6:44 am Advantage of holding at Fidelity is you can easily sell and use proceeds to buy something else if you wish.
This. Exactly.

You cannot sell on Treasury Direct. If you want to sell Treasuries held at Treasury Direct, you would have to first transfer the Treasuries to a broker, which may be a cumbersome process (as has been reported on the Forum).
Definitely a PITA to transfer funds from TD to a broker:

https://www.savingsbonds.gov/indiv/rese ... l_sell.htm


<<You can hold Treasury bills until they mature or sell them before they mature.

To sell a bill you hold in TreasuryDirect or Legacy Treasury Direct, first transfer the bill to a bank, broker, or dealer, then ask the bank, broker, or dealer to sell the bill for you.

How you transfer a bill to a bank, broker, or dealer depends on whether you hold the bill in TreasuryDirect or Legacy Treasury Direct.

For a bill held in TreasuryDirect:

Go to "Manage Direct"
Choose "Transfer securities"
Identify the bill or bills you want to transfer
Choose "External Transfer"
Click the link for FS Form 5511,"TreasuryDirect Transfer Request"
Complete FS Form 5511 and mail it as directed on the form

For a bill held in Legacy Treasury Direct, complete "Security Transfer Request"
(FS Form 5179) and mail it as directed on the form.>>

Form 5511: https://www.savingsbonds.gov/instit/for ... RNTIPS.htm

<<The account owner or account manager must appear before and establish identification to the satisfaction of an authorized certifying officer and sign the application in the officer's presence. The officer must then complete the certification form provided and imprint the seal or stamp required in certifying requests. For certifications within the United States, the certifying officer must be authorized to bind his or her institution by his or her acts and guarantee signatures to assignments of securities or certify assignments of securities. Certification by a notary isn’t acceptable.<<

Once you fill out Form 5511 and have it signed, you mail it back to TD.
Getting a Medallion stamp is very hard especially since most banks stopped doing them. Is that a must or is there a work around ?
evelynmanley
Posts: 415
Joined: Tue Sep 21, 2010 9:13 am

Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by evelynmanley »

JIMX7 wrote: Sun Jun 26, 2022 7:38 am
evelynmanley wrote: Wed Jun 22, 2022 10:26 am
ModifiedDuration wrote: Wed Jun 22, 2022 7:05 am
Call_Me_Op wrote: Wed Jun 22, 2022 6:44 am Advantage of holding at Fidelity is you can easily sell and use proceeds to buy something else if you wish.
This. Exactly.

You cannot sell on Treasury Direct. If you want to sell Treasuries held at Treasury Direct, you would have to first transfer the Treasuries to a broker, which may be a cumbersome process (as has been reported on the Forum).
Definitely a PITA to transfer funds from TD to a broker:

https://www.savingsbonds.gov/indiv/rese ... l_sell.htm


<<You can hold Treasury bills until they mature or sell them before they mature.

To sell a bill you hold in TreasuryDirect or Legacy Treasury Direct, first transfer the bill to a bank, broker, or dealer, then ask the bank, broker, or dealer to sell the bill for you.

How you transfer a bill to a bank, broker, or dealer depends on whether you hold the bill in TreasuryDirect or Legacy Treasury Direct.

For a bill held in TreasuryDirect:

Go to "Manage Direct"
Choose "Transfer securities"
Identify the bill or bills you want to transfer
Choose "External Transfer"
Click the link for FS Form 5511,"TreasuryDirect Transfer Request"
Complete FS Form 5511 and mail it as directed on the form

For a bill held in Legacy Treasury Direct, complete "Security Transfer Request"
(FS Form 5179) and mail it as directed on the form.>>

Form 5511: https://www.savingsbonds.gov/instit/for ... RNTIPS.htm

<<The account owner or account manager must appear before and establish identification to the satisfaction of an authorized certifying officer and sign the application in the officer's presence. The officer must then complete the certification form provided and imprint the seal or stamp required in certifying requests. For certifications within the United States, the certifying officer must be authorized to bind his or her institution by his or her acts and guarantee signatures to assignments of securities or certify assignments of securities. Certification by a notary isn’t acceptable.<<

Once you fill out Form 5511 and have it signed, you mail it back to TD.
Getting a Medallion stamp is very hard especially since most banks stopped doing them. Is that a must or is there a work around ?
If you search in the "Theory, News, and General" forum for "Medallion Signature" in the search box, you will see the responses of lots of BHs re: getting the medallion signature: search.php?st=0&sk=t&sd=d&sr=posts&keyw ... d%5B%5D=10

If you search in the "Personal Investments" you will see more responses: search.php?keywords=Medallion+signature&fid%5B0%5D=2

Also some info from Harry Sit about the signature guarantee (not medallion):

Where to Get a Signature Guarantee for I Bonds at TreasuryDirect
January 9, 2022 by Harry Sit
https://thefinancebuff.com/treasurydire ... bonds.html
wbarabas
Posts: 57
Joined: Mon Dec 21, 2020 9:26 am

Re: Where to buy T-Bill; Treasury Direct or Fidelity?

Post by wbarabas »

Anyone use Charles Schwab to purchase treasuries? Is this possible through a phone or do you need to be on a laptop. My phone doesn't have an option to purchase treasuries.
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