Buying T-Bills at Fidelity vs Treasury Direct

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
David_w
Posts: 120
Joined: Sat Feb 09, 2019 8:20 am
Location: South Florida

Buying T-Bills at Fidelity vs Treasury Direct

Post by David_w »

I thought I saw a post on this and searched but couldn't find anything.

Is there any advantage or disadvantage of buying T-Bills (3,6,9 month) at via Fidelity vs Treasury Direct? I have been told Fidelity is a secondary market but not sure if that makes a difference.
cowbman
Posts: 366
Joined: Sat Jan 14, 2017 2:10 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by cowbman »

Fidelity offers auction Treasury bills. The main advantage of TreasuryDirect is the likelihood of more options being available.
MrNister
Posts: 7
Joined: Thu Jul 14, 2022 2:46 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by MrNister »

I prefer buying Treasuries at Fidelity because they are much easier to sell than on Treasury Direct.
ModifiedDuration
Posts: 850
Joined: Sat Dec 05, 2015 4:33 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by ModifiedDuration »

MrNister wrote: Thu Aug 04, 2022 8:38 am I prefer buying Treasuries at Fidelity because they are much easier to sell than on Treasury Direct.
+1

If you want to sell Treasuries held at TreasuryDirect, you would have to transfer them to a broker first, which can be a challenge. Easy to sell at Fidelity.

You can easily buy Treasuries at auction through Fidelity.

Alternatively, you can easily buy Treasuries through the secondary market at Fidelity.
Last edited by ModifiedDuration on Thu Aug 04, 2022 8:50 am, edited 3 times in total.
aristotelian
Posts: 10502
Joined: Wed Jan 11, 2017 8:05 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by aristotelian »

I don't really see any advantage to buying at Treasury Direct. Have you considered buying an ETF like SHV or SHY?
User avatar
anon_investor
Posts: 12367
Joined: Mon Jun 03, 2019 1:43 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by anon_investor »

The only advantage I see of buying at Treasury Direct versus Fidelity, is that you can schedule an purchase of a new issue far in advance. At Fidelity you have to wait until the auction announcement, then you have a short window of ~1.5 days to place your order before the auction.

Both allow for "autoroll" (automatic re-purchase of the same amount/duration of treasury).

You can sell T-Bills on the secondary market at Fidelity, at Treasury Direct you have to first transfer it to a brokerage to sell, which may take a long time and require mailing in a paper form with a signature guarantee.

I have purchased my T-Bills at Fidelity, so I have the optionality to sell on the secondary market if I unexpectedly need the money for something.
User avatar
HueyLD
Posts: 9113
Joined: Mon Jan 14, 2008 10:30 am

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by HueyLD »

David_w wrote: Thu Aug 04, 2022 7:27 am I thought I saw a post on this and searched but couldn't find anything.

Is there any advantage or disadvantage of buying T-Bills (3,6,9 month) at via Fidelity vs Treasury Direct? I have been told Fidelity is a secondary market but not sure if that makes a difference.
Not being able to sell before maturity on TD can cause liquidity problems.

However, the minimum purchase on TD is only $100, a very affordable amount for anybody. Even though there is a maximum purchase amount of $5M for noncompetitive bids, I don’t think an average investor has to worry about the max. :-)
User avatar
anon_investor
Posts: 12367
Joined: Mon Jun 03, 2019 1:43 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by anon_investor »

HueyLD wrote: Thu Aug 04, 2022 8:57 am
David_w wrote: Thu Aug 04, 2022 7:27 am I thought I saw a post on this and searched but couldn't find anything.

Is there any advantage or disadvantage of buying T-Bills (3,6,9 month) at via Fidelity vs Treasury Direct? I have been told Fidelity is a secondary market but not sure if that makes a difference.
Not being able to sell before maturity on TD can cause liquidity problems.

However, the minimum purchase on TD is only $100, a very affordable amount for anybody. Even though there is a maximum purchase amount of $5M for noncompetitive bids, I don’t think an average investor has to worry about the max. :-)
I want to have the problem of not being able to buy more than $5M of T-Bills! :sharebeer
stocknoob4111
Posts: 2757
Joined: Sun Jan 07, 2018 12:52 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by stocknoob4111 »

I use TD only for iBonds... T-Bills I buy new issues at Fidelity
hafjell
Posts: 202
Joined: Tue Nov 10, 2015 8:49 am

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by hafjell »

stocknoob4111 wrote: Thu Aug 04, 2022 10:06 am I use TD only for iBonds... T-Bills I buy new issues at Fidelity
Can yu recommend a good source to read up on the difference / application of Tbills and iBonds?
john0608
Posts: 79
Joined: Sat Dec 09, 2017 9:22 am

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by john0608 »

i have been laddering t-bills thru vanguard, any reason fidelity would be better other than vanguard customer service? i will say vanguards fixed income desk is head and shoulders above general customer support and they have a direct line.
ModifiedDuration
Posts: 850
Joined: Sat Dec 05, 2015 4:33 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by ModifiedDuration »

hafjell wrote: Thu Aug 04, 2022 10:20 am
stocknoob4111 wrote: Thu Aug 04, 2022 10:06 am I use TD only for iBonds... T-Bills I buy new issues at Fidelity
Can yu recommend a good source to read up on the difference / application of Tbills and iBonds?
You can start on I Bonds here:

https://www.bogleheads.org/wiki/I_savings_bonds

And here for Treasury Bills:

https://www.bogleheads.org/wiki/Treasury_bill
User avatar
anon_investor
Posts: 12367
Joined: Mon Jun 03, 2019 1:43 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by anon_investor »

john0608 wrote: Thu Aug 04, 2022 10:29 am i have been laddering t-bills thru vanguard, any reason fidelity would be better other than vanguard customer service? i will say vanguards fixed income desk is head and shoulders above general customer support and they have a direct line.
At Fidelity you can auto roll your T-Bills. Why do you need to call Vanguard? I placed a order for 1mo T-Bills this week at Vanguard and Fidelity both completely online.
john0608
Posts: 79
Joined: Sat Dec 09, 2017 9:22 am

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by john0608 »

true, i only called them initially to get their opinions on t-bills vs cd's pros and cons and about potential commission costs (there is none) penalties for early withdrawal (you lose all i on a t-bill), just general questions, normally i order online as t-bills roll over.
Topic Author
David_w
Posts: 120
Joined: Sat Feb 09, 2019 8:20 am
Location: South Florida

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by David_w »

cowbman wrote: Thu Aug 04, 2022 8:12 am Fidelity offers auction Treasury bills. The main advantage of TreasuryDirect is the likelihood of more options being available.
I had someone at Fidelity walk me through how to do this and he specifically said this was on the secondary market.
Topic Author
David_w
Posts: 120
Joined: Sat Feb 09, 2019 8:20 am
Location: South Florida

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by David_w »

cowbman wrote: Thu Aug 04, 2022 8:12 am Fidelity offers auction Treasury bills. The main advantage of TreasuryDirect is the likelihood of more options being available.
I had someone at Fidelity walk me through how to do this and he specifically said this was on the secondary market.
Topic Author
David_w
Posts: 120
Joined: Sat Feb 09, 2019 8:20 am
Location: South Florida

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by David_w »

ModifiedDuration wrote: Thu Aug 04, 2022 8:46 am
MrNister wrote: Thu Aug 04, 2022 8:38 am I prefer buying Treasuries at Fidelity because they are much easier to sell than on Treasury Direct.
+1

If you want to sell Treasuries held at TreasuryDirect, you would have to transfer them to a broker first, which can be a challenge. Easy to sell at Fidelity.

You can easily buy Treasuries at auction through Fidelity.

Alternatively, you can easily buy Treasuries through the secondary market at Fidelity.
Does it matter if you buy at auction or secondary market via Fidelity?
cubs1999
Posts: 75
Joined: Tue Jun 07, 2022 11:40 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by cubs1999 »

HueyLD wrote: Thu Aug 04, 2022 8:57 am
David_w wrote: Thu Aug 04, 2022 7:27 am I thought I saw a post on this and searched but couldn't find anything.

Is there any advantage or disadvantage of buying T-Bills (3,6,9 month) at via Fidelity vs Treasury Direct? I have been told Fidelity is a secondary market but not sure if that makes a difference.
Not being able to sell before maturity on TD can cause liquidity problems.

However, the minimum purchase on TD is only $100, a very affordable amount for anybody. Even though there is a maximum purchase amount of $5M for noncompetitive bids, I don’t think an average investor has to worry about the max. :-)
I'll never have to worry about that limit but I'm curious about it as I wondered when I saw disclaimer on Fido.

Is that limit per purchase or is it one can't buy more than. 5 million on secondary market aggregate under their account?
User avatar
whodidntante
Posts: 11013
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by whodidntante »

David_w wrote: Thu Aug 04, 2022 9:02 pm
ModifiedDuration wrote: Thu Aug 04, 2022 8:46 am
MrNister wrote: Thu Aug 04, 2022 8:38 am I prefer buying Treasuries at Fidelity because they are much easier to sell than on Treasury Direct.
+1

If you want to sell Treasuries held at TreasuryDirect, you would have to transfer them to a broker first, which can be a challenge. Easy to sell at Fidelity.

You can easily buy Treasuries at auction through Fidelity.

Alternatively, you can easily buy Treasuries through the secondary market at Fidelity.
Does it matter if you buy at auction or secondary market via Fidelity?
If it's not at auction, it is secondary. I don't think you should care, though. The yields are sometimes higher on secondary, and even if worse, not extremely worse. The difference could matter if you are trading millions. For 100k, you might be overthinking this.
Topic Author
David_w
Posts: 120
Joined: Sat Feb 09, 2019 8:20 am
Location: South Florida

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by David_w »

whodidntante wrote: Thu Aug 04, 2022 11:14 pm
David_w wrote: Thu Aug 04, 2022 9:02 pm
ModifiedDuration wrote: Thu Aug 04, 2022 8:46 am
MrNister wrote: Thu Aug 04, 2022 8:38 am I prefer buying Treasuries at Fidelity because they are much easier to sell than on Treasury Direct.
+1

If you want to sell Treasuries held at TreasuryDirect, you would have to transfer them to a broker first, which can be a challenge. Easy to sell at Fidelity.

You can easily buy Treasuries at auction through Fidelity.

Alternatively, you can easily buy Treasuries through the secondary market at Fidelity.
Does it matter if you buy at auction or secondary market via Fidelity?
If it's not at auction, it is secondary. I don't think you should care, though. The yields are sometimes higher on secondary, and even if worse, not extremely worse. The difference could matter if you are trading millions. For 100k, you might be overthinking this.
For 1million does it make a difference?
MrJedi
Posts: 2213
Joined: Wed May 06, 2020 11:42 am

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by MrJedi »

The US treasury secondary market is extremely efficient like the stock market. Large institutions, foreign governments, etc. all participate in it. If there is a free lunch to be had somewhere, a professional trader, algorithm, etc. will quickly pick it up.
User avatar
HueyLD
Posts: 9113
Joined: Mon Jan 14, 2008 10:30 am

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by HueyLD »

cubs1999 wrote: Thu Aug 04, 2022 10:53 pm Is that limit per purchase or is it one can't buy more than. 5 million on secondary market aggregate under their account?
“ The limit for noncompetitive purchases is $5 million for each security type and term, for each auction. This limit applies regardless of whether you're buying a bill, note, bond, Floating Rate Note, or TIPS, and regardless of what method you use to make the purchase (TreasuryDirect, broker, or dealer).”

https://www.treasurydirect.gov/indiv/re ... s_0406.htm
cowbman
Posts: 366
Joined: Sat Jan 14, 2017 2:10 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by cowbman »

David_w wrote: Thu Aug 04, 2022 9:01 pm
cowbman wrote: Thu Aug 04, 2022 8:12 am Fidelity offers auction Treasury bills. The main advantage of TreasuryDirect is the likelihood of more options being available.
I had someone at Fidelity walk me through how to do this and he specifically said this was on the secondary market.
To the right of secondary is a link that states "auction"
lws
Posts: 501
Joined: Tue Apr 25, 2017 6:12 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by lws »

MrJedi wrote: Fri Aug 05, 2022 6:41 am The US treasury secondary market is extremely efficient like the stock market. Large institutions, foreign governments, etc. all participate in it. If there is a free lunch to be had somewhere, a professional trader, algorithm, etc. will quickly pick it up.
Yes. It's really a beautiful thing.
User avatar
squirrel1963
Posts: 564
Joined: Wed Jun 21, 2017 10:12 am
Location: Portland OR area

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by squirrel1963 »

David_w wrote: Thu Aug 04, 2022 9:01 pm
cowbman wrote: Thu Aug 04, 2022 8:12 am Fidelity offers auction Treasury bills. The main advantage of TreasuryDirect is the likelihood of more options being available.
I had someone at Fidelity walk me through how to do this and he specifically said this was on the secondary market.
This is definitely not true.
You can buy both on secondary market and at auction at Fidelity, Vanguard, Schwab and so on.

In general I see no advantage in buying treasuries at TD versus Fidelity unless you want to schedule auction buy in advance.

I-bonds and EE-bonds on the other hand are only available at TD, and that's why I have a TD account.
| LMP | safe portfolio: TIPS ladder + I-bonds + Treasuries | risky portfolio: US stocks / US REIT / International stocks |
Topic Author
David_w
Posts: 120
Joined: Sat Feb 09, 2019 8:20 am
Location: South Florida

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by David_w »

cowbman wrote: Fri Aug 05, 2022 1:30 pm
David_w wrote: Thu Aug 04, 2022 9:01 pm
cowbman wrote: Thu Aug 04, 2022 8:12 am Fidelity offers auction Treasury bills. The main advantage of TreasuryDirect is the likelihood of more options being available.
I had someone at Fidelity walk me through how to do this and he specifically said this was on the secondary market.
To the right of secondary is a link that states "auction"
I looked but didn't see "auction". Do you think there is an advantage to auction vs secondary market or vice versa?
BogleMelon
Posts: 2884
Joined: Mon Feb 01, 2016 11:49 am

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by BogleMelon »

john0608 wrote: Thu Aug 04, 2022 2:29 pm true, i only called them initially to get their opinions on t-bills vs cd's pros and cons and about potential commission costs (there is none) penalties for early withdrawal (you lose all i on a t-bill), just general questions, normally i order online as t-bills roll over.
I call "Bogleheads" for general questions :D
"One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather
cubs1999
Posts: 75
Joined: Tue Jun 07, 2022 11:40 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by cubs1999 »

HueyLD wrote: Fri Aug 05, 2022 8:42 am
cubs1999 wrote: Thu Aug 04, 2022 10:53 pm Is that limit per purchase or is it one can't buy more than. 5 million on secondary market aggregate under their account?
“ The limit for noncompetitive purchases is $5 million for each security type and term, for each auction. This limit applies regardless of whether you're buying a bill, note, bond, Floating Rate Note, or TIPS, and regardless of what method you use to make the purchase (TreasuryDirect, broker, or dealer).”

https://www.treasurydirect.gov/indiv/re ... s_0406.htm
So I noticed today Fidelity now says 10 million + orders need to call a fixed income specialist (used to say 5 million). Did this just change?

Edit:
I clicked on that link and I guess it just changed since I last looked at this thread.
smectym
Posts: 1400
Joined: Thu May 26, 2011 5:07 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by smectym »

anon_investor wrote: Thu Aug 04, 2022 1:11 pm
john0608 wrote: Thu Aug 04, 2022 10:29 am i have been laddering t-bills thru vanguard, any reason fidelity would be better other than vanguard customer service? i will say vanguards fixed income desk is head and shoulders above general customer support and they have a direct line.
At Fidelity you can auto roll your T-Bills. Why do you need to call Vanguard?

>>I placed a order for 1mo T-Bills this week at Vanguard and Fidelity both completely online.<<
And I placed a order on Treasury Direct just today (8/9) for 3 month and 6 month bills, and 2 yr and 3 yr notes. Bang bang.
I’m rather a fan of TD.
User avatar
anon_investor
Posts: 12367
Joined: Mon Jun 03, 2019 1:43 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by anon_investor »

smectym wrote: Tue Aug 09, 2022 9:21 pm
anon_investor wrote: Thu Aug 04, 2022 1:11 pm
john0608 wrote: Thu Aug 04, 2022 10:29 am i have been laddering t-bills thru vanguard, any reason fidelity would be better other than vanguard customer service? i will say vanguards fixed income desk is head and shoulders above general customer support and they have a direct line.
At Fidelity you can auto roll your T-Bills. Why do you need to call Vanguard?

>>I placed a order for 1mo T-Bills this week at Vanguard and Fidelity both completely online.<<
And I placed a order on Treasury Direct just today (8/9) for 3 month and 6 month bills, and 2 yr and 3 yr notes. Bang bang.
I’m rather a fan of TD.
I do like how you can place more than 1.5 days before the auction at TD.
cowbman
Posts: 366
Joined: Sat Jan 14, 2017 2:10 pm

Re: Buying T-Bills at Fidelity vs Treasury Direct

Post by cowbman »

David_w wrote: Mon Aug 08, 2022 1:11 pm
cowbman wrote: Fri Aug 05, 2022 1:30 pm
David_w wrote: Thu Aug 04, 2022 9:01 pm
cowbman wrote: Thu Aug 04, 2022 8:12 am Fidelity offers auction Treasury bills. The main advantage of TreasuryDirect is the likelihood of more options being available.
I had someone at Fidelity walk me through how to do this and he specifically said this was on the secondary market.
To the right of secondary is a link that states "auction"
I looked but didn't see "auction". Do you think there is an advantage to auction vs secondary market or vice versa?
Yes, auction is the TD price. Secondary markets you'll pay the spread.
Post Reply