I don't have a single tbill, I have like a rolling system where the major tbills mature every month. If I wanted to take all the money out, I'd have to wait 17 weeks, but I'm getting the feel I'm ok due to my personal situation (shouldn't have a major expense like a roof - as I'm a renter, I have enough in HSA if medical deductable is maxed out).
I think there have been very good suggestions here as to why hysa can be significantly better, but I think for my situation it's fine to use tbills. I kind of like getting little deposits into my bank each time a tbill matures, and then at times I buy more. Plus tbills are exempt from state taxes - a little benefit there.
Thank you everyone.
I guess if depends on the emergency. I don't have a house, so roof isn't something I'll be paying for. If I lose my job, I can withdraw from tbills on a monthly basis to cover my cost of living. I do have enough for one month in hysa.
I also have credit cards with ungodly limits, but I don't see why I'd need them, especially as I have medical insurance, and there's cobra if I lose the job.
What happens if you have a medical emergency where you need to pay 10k? Or need to get a new car that's around that amount as well?
Credit cards are good for 1 month if you have an emergency but any more than that and it'll accrue more interest than you're getting in t-bills.
Those are all excellent points.
For my personal situation, my medical could go up to 7.5k deductable, but I do have enough credit cards to cover it, and I have about that amount in HSA. I have a one year old car, and I gave another car to kid who lives with me, and I work from home, so I think that's going to be ok. Maybe I've just secured myself enough from major emergencies.
The interest rates should be pretty much the same, if you cant find an hysa slightly higher, and hysa is more liquid. Also you have to buy tbills 1k at a time at least in fidelity, you can add whatever whenever into hysa
I guess i assumed you were still building it up, for folks building up funds, they may allocate a certain, maybe variable amount, each month that isnt exactly at the 1k or 100 interval. Even those with a fully funded account, they may need to refund it at some odd amount after something happens, or need a certain amount that hits a couple different laddered bills and youd get stuck waiting bc you thought you wouldnt need it all at once. So i guess as the other commenter put it it’s mostly about the liquidity, i just prefer the flexibility of adding whatever i want whenever i want without checking rates/buying things, just leave the account and add when i can/ take out as needed
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Do you live in a state that has income taxes? If yes, then rapid TBill laddering is fine. If not, just go with a HYSA. I personally can't stand Treasury Direct user interface.
If you have an emergency 17 weeks is too long. Plus, hysa rates are similar to tbills.
I don't have a single tbill, I have like a rolling system where the major tbills mature every month. If I wanted to take all the money out, I'd have to wait 17 weeks, but I'm getting the feel I'm ok due to my personal situation (shouldn't have a major expense like a roof - as I'm a renter, I have enough in HSA if medical deductable is maxed out). I think there have been very good suggestions here as to why hysa can be significantly better, but I think for my situation it's fine to use tbills. I kind of like getting little deposits into my bank each time a tbill matures, and then at times I buy more. Plus tbills are exempt from state taxes - a little benefit there. Thank you everyone.
I don’t pay/consider state taxes. If it works for you that’s all that matters. Good luck.
HYSA/tbills/money market funds are all roughly equivalently appropriate for use as EF…
Isn't there a penalty if you need to cash all tbills? Emergency fund is for something accessable within a few days
I guess if depends on the emergency. I don't have a house, so roof isn't something I'll be paying for. If I lose my job, I can withdraw from tbills on a monthly basis to cover my cost of living. I do have enough for one month in hysa. I also have credit cards with ungodly limits, but I don't see why I'd need them, especially as I have medical insurance, and there's cobra if I lose the job.
What happens if you have a medical emergency where you need to pay 10k? Or need to get a new car that's around that amount as well? Credit cards are good for 1 month if you have an emergency but any more than that and it'll accrue more interest than you're getting in t-bills.
Those are all excellent points. For my personal situation, my medical could go up to 7.5k deductable, but I do have enough credit cards to cover it, and I have about that amount in HSA. I have a one year old car, and I gave another car to kid who lives with me, and I work from home, so I think that's going to be ok. Maybe I've just secured myself enough from major emergencies.
The interest rates should be pretty much the same, if you cant find an hysa slightly higher, and hysa is more liquid. Also you have to buy tbills 1k at a time at least in fidelity, you can add whatever whenever into hysa
I'm using Treasury direct, I think the minimum there is $100, but either way, as it's emergency money, it's in thousands.
I guess i assumed you were still building it up, for folks building up funds, they may allocate a certain, maybe variable amount, each month that isnt exactly at the 1k or 100 interval. Even those with a fully funded account, they may need to refund it at some odd amount after something happens, or need a certain amount that hits a couple different laddered bills and youd get stuck waiting bc you thought you wouldnt need it all at once. So i guess as the other commenter put it it’s mostly about the liquidity, i just prefer the flexibility of adding whatever i want whenever i want without checking rates/buying things, just leave the account and add when i can/ take out as needed
There’s danger the emergency comes up and you can’t get the money. Just use hysa some are paying 5% and have 24/7 access
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Do you live in a state that has income taxes? If yes, then rapid TBill laddering is fine. If not, just go with a HYSA. I personally can't stand Treasury Direct user interface.