Fixed income question re CDs v treasuries
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Anonymous
| Apologies in advance if this is a dumb question: I logged into Schwab to purchase some fixed income positions. At present, a US treasury that matures on 8/3 has a YTM of 4.869. (If the date is the issue, a US treasury maturing on 8/15 offers a YTM of 4.805.) By contrast, the top CD offered in the 6 month category matures on 8/14 has a APY of 4.755%. Given that, as I understand it at least, the US treasury is free of state tax, is it right to conclude that the treasury--with the greater yield than the CD--is plainly the better option, as the tax benefit is an extra kicker? Or am I missing something here? Is the treasury "YTM" metric not equivalent to the CD "APY" metric? |
Anonymous
|
Not a dumb question.
Yes, treasuries generally are a better deal than CDs right now. That's why lots of us are building treasury bond ladders instead of CD ladders. |