Buying T-Bills at auction through Vanguard

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jms306
Posts: 2
Joined: Sat Mar 19, 2016 11:53 am

Buying T-Bills at auction through Vanguard

Post by jms306 »

Hello Boggleheads,

I am new to buying individual bonds and I am having trouble navigating the logistics of how to purchase them through Vanguard.  Hoping for some insight as to how to purchase short term T-bills while keeping fully invested at all times.  As far as I can tell, Vanguard has no option to set up an automated ladder, so I manually go in and purchase a new one when the previous one comes due. (For now I am buying them at auction because navigating Vanguard's interface for buying on the secondary market goes way over my head).  My first question is about the timing.  Say I have a four month T-Bill coming due this Wednesday, and I would like to immediately roll that same money into another four month T-bill.  My settlement account doesn't show those funds as available from the first T-Bill coming due until after the cut off time for needing to purchase the next one, so it looks to me like I have to wait it out and have that cash sitting there doing nothing for week until the following Wednesday before I am able to put that cash to work in another four month T-bill?  Is there a way to avoid that idle week?  The other thing I am wondering about is if there is a way to put all the money I want in the T-bill into the investment without some left over.  Say I have 100,000 in my settlement account and I want to put it in a T-bill.  So I purchase a T-Bill with a 100,000 face value, and after the auction, I pay 99,700 for that T bill.  So $300 is leftover in my settlement account, uninvested.  Is there a way to be able to get the full 100K invested?  Hopefully my questions make sense and thanks in advance for helping a novice!  
chinchin
Posts: 168
Joined: Tue Nov 14, 2017 8:02 pm

Re: Buying T-Bills at auction through Vanguard

Post by chinchin »

Is there a way to avoid that idle week?
Margin account (you'll lose money paying interest though).
So $300 is leftover in my settlement account, uninvested. Is there a way to be able to get the full 100K invested?
Don't know about VG, but Fido requires $1000 in cash to bid for one bond at auction. So, no (if VG is the same).
not financial advice
Hilltop
Posts: 35
Joined: Wed Nov 22, 2017 8:42 pm

Re: Buying T-Bills at auction through Vanguard

Post by Hilltop »

This does not answer either of your good questions, but funds from the matured bonds would earn settlement fund interest until the next rung on the ladder is purchased. The 7-day SEC yield on Vanguard Federal Money Market Fund is currently around 3.6%.
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