Bassman007
Platinum Member
- Sep 10, 2015
- 6,995
- 1,210
- 1,095
- Banned
- #281
Secondary Market...That's what I thought.
You can sell them in any federal reserve bank, in the primary market. What you can't do is force the Fed to pay you the interest that you didn't earn.
How dumb are you people?
What Is the Penalty of Cashing in T-Bills Before Maturity?
by Wanda Thibodeaux
When considering where to put their money, many investors look at options through the U.S. Department of the Treasury. One choice is the Treasury Bill, also known as the T-bill. People sometimes sell or cash in their Treasury bills early to meet their financial needs. This can mean taking a loss on the investment.
T-Bill Basics
A Treasury bill is a short-term debt instrument issued by the Department of the Treasury. These bills, considered among the safest investments in the world, mature in less than one year, usually at four weeks, 13 weeks, 26 weeks or 52 weeks.
Investors usually buy these bonds at less than face value. For example, you might pay $980 for a $1,000 bill. The difference between what you pay and the face value of the bill is interest. Technically there is no penalty for cashing out one of these bills early, because of the short nature of the investment.
Interest and Value
A major difference between T-bills and other Treasury securities is that you receive no interest until the bond matures. If you sell a bond to get your money early, the value of the bond to you no longer is the difference between your payment and the bond's face value. The value becomes the difference between your payment and whatever amount you get for the bond.
The Impact of Selling Early
Interest rates on T-bills fluctuate. If you sell your T-bill after interest rates have gone up, the resale value generally is reduced. Conversely, if you sell when rates have decreased, the resale value generally increases. So depending on when you sell, you might receive less than you paid for the bond. Because you aren't keeping the T-bill until the maturity date, you also won't get the interest, although getting your principal investment back is the main concern.
Other Considerations
It is possible to get T-bills directly from the government, at no fee. However, if you sell through a bank, broker or other dealer, the dealer might charge you a commission or transaction fee for handling your T-bills. This further decreases their value to you.
Bottom Line
In general, even though there is not a technical penalty for early cashing of T-bills because of the way T-bills are sold and how the Treasury pays interest, cashing in early may mean you don't get back all the money you invested. Because T-bills have such a short time to maturity, it's usually better to avoid the risks of selling.
Why is Wanda Thibodeaux your sole proof?
Shouldn't the Banks themselves post this for their customers?
Who are you gonna believe, the Fed, US Treasury and major banks?
Or....
Wanda Marie Thibodeaux is a freelance copy- and ghostwriter based in Minnesota. A graduate of Central Michigan University and sole proprietor of Takingdictation.com, Thibodeaux focuses her business content on innovation, entrepreneurship, and management. She has a particular interest in the scientific and psychological underpinnings of business operations. She has written blogs, website and marketing content, e-books, web articles, and product descriptions. When not writing, she teaches music to private pupils. She lives with her husband and two children.
A freelance writer with no market experience?
What Is the Penalty of Cashing in T-Bills Before Maturity?
How T-Bills Work
Federal Treasury bills work much like bonds, although they represent a shorter-term investment. Bond terms usually range from one year to as many as 30, while T-bills have monthly, quarterly, semi-annual and yearly terms. Both are essentially IOUs. When you buy T-bills, you're loaning money to the government in exchange for a set amount of profit. For example, you might purchase T-bills for $980 and receive $1,000 for them a few months later when they mature. That $20 per T-bill represents your profit.
Selling a T-Bill
Selling a T-bill is a simple process. If you've bought yours through the Treasury Department's retail arm, Treasury Direct, you'll have to transfer it to a bank or brokerage first. The appropriate form is on the Treasury Direct website. If you purchase your T-bills through your bank or another dealer or broker, it's just a question of telling that source to sell it for you. There are no formal fees or charges involved in selling your T-bills before maturity, though you do forfeit the remainder of your potential gains. You also face the potential for loss through indirect costs.
Indirect Costs
Although the U.S. Treasury Department itself doesn't charge a fee for selling your T-bills prematurely, the brokerage or bank that handles the transaction for you almost certainly will. During times of low interest rates and low returns, even a small transaction fee can negate any profit from your T-bills. The value of your T-bills in the marketplace is determined by fluctuations in the exchange rate. If rates are going down, a T-bill increases in value and you might still turn a profit. If rates are going up, however, a T-bill decreases in value and might cause further losses.
Relative Liquidity
T-bills and other conservative investments, such as CDs, represent a balance between returns and liquidity. Liquidity means your ability to gain access to your money when you need it without unnecessarily high costs. For example, your savings account at the bank is completely liquid. You can withdraw from it any time you need to and you'll pay no penalty. CDs pay a higher rate of interest, but you'll pay a substantial penalty if you withdraw your funds before the maturity date. For many investors, the short maturity terms and comparatively high returns for T-bills make them an attractive option in this investment niche.
Yawning
PS. Did Trump embargo China yet?
Another big yawn..............
ZZZZZZZZ!
Still pointing and laughing.
Can you find a third nobody source to back up your claim? DERP!
Sure, I could find hundreds, but you would still be a poor slob, nothing is going to change that, and my bond fund appreciated by a full half a percent today.
So wheeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee
Yawning
![Yawning.jpg](/proxy.php?image=http%3A%2F%2Fsaypeople.com%2Fwp-content%2Fuploads%2F2011%2F09%2FYawning.jpg&hash=efb85348885a644cb5c4ee1ab9b60ba6)