Treasury bonds vs CDs: Which is better and what are the downsides?
Treasury bonds offer an exemption from state and local taxes, making them attractive compared to CDs, but investors have to weigh whether to lock in current rates or risk missing future increases. Choosing between them depends on how you plan to time your savings goals and whether state tax savings outweigh the flexibility of certificate terms.
What people tried
Every workaround mentioned in the threads below. We haven’t tested any of them — and nobody here is claiming they worked.
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Treasury bonds vs CDs: Which is better and what are the downsides?
- 1Using tax yield calculators to compare the after-tax yield of CDs versus Treasuries or money market funds like VUSXX.Did this help you?
- 2Stopping automatic rollovers to keep money in savings while evaluating ratesDid this help you?
- 3Keeping funds in a high-yield savings account for better liquidityDid this help you?
- 4Searching online for alternative accounts with slightly higher interest ratesDid this help you?
In their words
Unedited, grouped by where they were said, most upvoted first within each place, each linked to the thread it came from.
“my HYSA is only 3.4%, and i want my money to grow as soon as possible (like everyone else) so i can buy an apartment. i'm thinking about opening a 6-month CD to deposit between $1,500 and $2,800 from january through july. do you think it’s worth it?”source ↗
“I really don't know much about Treasuries...I've been using CDs for a fund that eventually I'd like to use for a downpayment, but all this talk about US Bonds in the news drew my attention to US Treasuries and I'm seeing that they're exempt from state tax. Any potential downsides I should know about?”source ↗
“Should we lock in, or are the rates gonna keep going up?”source ↗
Where this came up
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