Buying T-Bills at Fidelity vs Treasury Direct

[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]

Fidelity offers auction Treasury bills. The main advantage of TreasuryDirect is the likelihood of more options being available.

[MrNister]

I prefer buying Treasuries at Fidelity because they are much easier to sell than on Treasury Direct.

[ModifiedDuration]

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.

[aristotelian]

I don't really see any advantage to buying at Treasury Direct. Have you considered buying an ETF like SHV or SHY?

[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.

[HueyLD]

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.

[anon_investor]

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!

[stocknoob4111]

I use TD only for iBonds... T-Bills I buy new issues at Fidelity

[hafjell]

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]

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]

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

[anon_investor]

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]

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.

[David_w]

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.

[David_w]

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.

[David_w]

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]

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?

[whodidntante]

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.

[David_w]

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]

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.

[HueyLD]

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]

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]

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.

[squirrel1963]

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.

[David_w]

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]

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

[cubs1999]

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]

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.

[anon_investor]

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]

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.