Comments on: Schwab makes it easy to buy treasuries at auction http://www.experiglot.com/2006/10/16/schwab-makes-it-easy-to-buy-treasuries-at-auction/ Because you shouldn't need an MBA to be savvy about finance and business Sun, 14 Mar 2010 04:42:12 +0000 http://wordpress.org/?v=abc hourly 1 By: Purchased my first 4-week T-bill on Treasury Direct | Experiments in Finance http://www.experiglot.com/2006/10/16/schwab-makes-it-easy-to-buy-treasuries-at-auction/comment-page-1/#comment-5402 Purchased my first 4-week T-bill on Treasury Direct | Experiments in Finance Tue, 24 Oct 2006 18:03:21 +0000 http://www.experiglot.com/2006/10/16/schwab-makes-it-easy-to-buy-treasuries-at-auction/#comment-5402 [...] Following up on my earlier post this week about buying the 3-month T-bill at Schwab, I also used Treasury Direct to buy my first 4-week bill this week. T-bill rates are rebounding after a big dip in September, as you can see below: [...] [...] Following up on my earlier post this week about buying the 3-month T-bill at Schwab, I also used Treasury Direct to buy my first 4-week bill this week. T-bill rates are rebounding after a big dip in September, as you can see below: [...]

]]> By: Ricemutt http://www.experiglot.com/2006/10/16/schwab-makes-it-easy-to-buy-treasuries-at-auction/comment-page-1/#comment-4365 Ricemutt Mon, 16 Oct 2006 23:06:19 +0000 http://www.experiglot.com/2006/10/16/schwab-makes-it-easy-to-buy-treasuries-at-auction/#comment-4365 To find your tax-equivalent yield, you need to know both your federal and state income tax brackets. The formula for calculating this is listed in my post about <a href="http://www.experiglot.com/2006/09/13/calculating-tax-equivalent-yields/" rel="nofollow">calculating tax equivalent yields</a>, and you can see an example of the different effective yields in another post on <a href="http://www.experiglot.com/2006/08/15/using-treasury-direct-to-buy-t-bills/" rel="nofollow">treasuries</a>. In this case, I'm assuming my federal tax bracket is 25% and my state tax bracket is 9.3%. If you don't itemize, the higher your federal tax bracket, the better the tax-equivalent return on the treasury. Fatwallet has that nice thread on treasuries too, if you take a look at the Finance forum and do a search for "treasury". Hope that helps! To find your tax-equivalent yield, you need to know both your federal and state income tax brackets. The formula for calculating this is listed in my post about calculating tax equivalent yields, and you can see an example of the different effective yields in another post on treasuries. In this case, I’m assuming my federal tax bracket is 25% and my state tax bracket is 9.3%. If you don’t itemize, the higher your federal tax bracket, the better the tax-equivalent return on the treasury. Fatwallet has that nice thread on treasuries too, if you take a look at the Finance forum and do a search for “treasury”. Hope that helps!

]]> By: Getting To Enough http://www.experiglot.com/2006/10/16/schwab-makes-it-easy-to-buy-treasuries-at-auction/comment-page-1/#comment-4364 Getting To Enough Mon, 16 Oct 2006 22:59:18 +0000 http://www.experiglot.com/2006/10/16/schwab-makes-it-easy-to-buy-treasuries-at-auction/#comment-4364 I'm glad I ran across your post because I had been considering doing the same thing at Schwab or Fidelity and wondered how well in practice buying treasuries at auction through a broker rather than TreasuryDirect would work. Like you, I'd rather not have to worry about transferring money to a TreasuryDirect account and instead have it in one consolidated brokerage account. I was wondering about your calculation for the tax-equivalent yield, though. You mentioned your tax-equivalent yield was based on your tax rate of 25%. Were you using your federal tax rate instead of your state tax rate? I’m glad I ran across your post because I had been considering doing the same thing at Schwab or Fidelity and wondered how well in practice buying treasuries at auction through a broker rather than TreasuryDirect would work. Like you, I’d rather not have to worry about transferring money to a TreasuryDirect account and instead have it in one consolidated brokerage account.

I was wondering about your calculation for the tax-equivalent yield, though. You mentioned your tax-equivalent yield was based on your tax rate of 25%. Were you using your federal tax rate instead of your state tax rate?

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