Even making a few dollars on your savings is better than nothing. It is also important you do this in a way you do not put your capital at risk. T- bills also known as treasury bills are considered among the safest investment as it is backed by the American government and released by its finance department. A treasury bill is a government-issued short-term debt instrument. The government pays back the amount you invest with interest.
An example of how this works is the Treasury
auctions T-bills to investors, who purchase the security at a discount
to the face value. Meaning, an investor purchases a bill with a
$1,000 face value and a six-month maturity for $950. In six
months, when the investment matures, the investor receives $1,000,
producing $50 in profit. One of the people I spoke with said, "I will be getting over $4,000 more a year and it's easier than trying to pick up pennies in front of a steamroller."
Treasury bills are a good investment option for those of us not looking to have our money tied up for long periods of time. A person can purchase T-bills directly from the U.S. Treasury’s auction site,
treasurydirect.gov, or through a broker, bank, or dealer. Simply go to the site and click on "Treasury Marketable Securities" at the top. If you would rather gather information on this investment option on your own it is easy to do. What you will find is that you can
- Buy U.S. Treasuries directly from the Treasury Department
- Investing in T-bills is commission free
- You cannot resell here, you must hold until maturity
|For Years, The Treasury Offered Savers Little, That Has Changed |
Even higher is the yield offered on Treasury Inflation Protected Securities, also known as TIPS. These generally carry a term of 5, 10, or 30 years. TIPS are a special kind of bill designed to protect you against inflation. Unlike other Treasury securities, when the TIPS matures, if the principal is higher than the original amount, you get the increased amount. If the principal is lower than the original amount, you still get the original amount. TIPS pay a fixed rate of interest every six months until they mature. These can be held until they mature or be sold earlier if you choose to do so.