I have an investment account and in the past have always bought mutual funds and ETfs while reserve cash is in Money Market.

I understand the basics about bonds and Vanguard has some pretty good educational tools explaining face value, coupon, yield, maturity, duration, quality ratings, interest rate risk, bond types-Treasury/Muni/Corporate, yield curve, being callable, and more.

https://investor.vanguard.com/...types/what-is-a-bond

So I logged onto my account to take a look. My cash reserves MM is paying 4.29 percent while 4-6 month Treasury Bills were 4.81 when I looked so I bought $2000 worth that expires in July for a test drive. I don't want to be a bond trader but just looking at ways for maybe some more yield. I fully expect the fed is going to raise interest rates again so MM will also go up. Of course with inflation as it is the interest rate scenario sure is murky and I will leave most of our cash reserves in Money Market. At 71 I don't want to take on very much risk.

Wow is the yield curve messed up right now! Anyhow it was a pretty painless process if anyone else is interested in buying some bonds after understanding the basics and the risks.

This message has been edited. Last edited by: grumpy1,

Did you mean to say "painful"? I have found buying Treasury securities to be quite easy with Schwab and Fidelity.

I have moved about 30% of my brokerage funds into Treasuries over the past couple of months. Most in the 3-6 month maturities, and some 2-3 year maturities. Anything longer than 3 years is too risky for me with the Fed raising rates.

In taxable accounts, the interest paid on US Treasury securities is exempt from State Income Tax.

quote:

Originally posted by grumpy1:
[QUOTE]Originally posted by Hay2bale:
Did you mean to say "painful"? I have found buying Treasury securities to be quite easy with Schwab and Fidelity.

I have moved about 30% of my brokerage funds into Treasuries over the past couple of months. Most in the 3-6 month maturities, and some 2-3 year maturities. Anything longer than 3 years is too risky for me with the Fed raising rates.

In taxable accounts, the interest paid on US Treasury securities is exempt from State Income Tax.

Thanks for catching that as I meant painless and edited my post.

I agree with your too risky assessment and would not be surprised to see higher long term rates in the no too distant future. Being in retirement I had been looking at more options for income and this knowledge has helped. Good point about taxes too. Thanks for the input.

This is what Vanguard bond buying opening page looks like. Then you click the interest rate you are interested in for the bond category.