The theme this week on the Retirement Quick Tips Podcast is: How to earn more on your cash. So far this week, I’ve covered money market funds, high yield savings accounts, and floating rate funds. These are all investments that offer liquidity and a high level of safety without tying up your money for a specific period of time. 

If you want any hoping of earning more that 1% on your cash right now, you’ll want to start venturing into tying up your money for a set period of time - say 3 or 6 months. 

A great way to do that with an investment that is short term - in this case only invested for 6 months, and offers the highest degree of safety - backed by the full faith and credit of the US government - still the safest place to put your money in the world - then you’ll want to consider T Bills. 

T bills are treasury bills (aka bonds) that have a maturity of 1 year or less. What make a T bill different than a regular treasury bond is simply the shorter term of the investment period. 

Right now you can purchase a 6 month T Bill and earn an annualized yield of 1.435%. Not too bad for a risk-free way to invest your cash for the next 6 months in this very low interest rate environment. 

Despite their safety and relatively decent rates right now, there are a couple drawbacks to these investments: 

1. could lose money if you need to sell early, and 
2. if you buy short term treasury bills directly from the treasury, there are no fees, but it’s one more place you’ll need to open an account and keep track your funds 

You can buy other investments like mutual funds and exchange traded funds that own T Bills, so you don’t need to buy the T Bills directly from the treasury and open a new account, but the added fees on these investments will reduce the yield. 

That’s it for today. Thanks for listening! My name is Ashley Micciche and this is the Retirement Quick Tips podcast. 

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Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance