Many investors keep cash as part of their portfolio. In times of falling prices, it is good to have some cash on hand in order to buy stocks while they are on sale. One question I had was what to do with cash. While I am overall very pleased with my online broker, they like most other brokerages pay only a pittance of interest for cash in your account. Most regular savings account interest rates are low. If I invest in a CD, the cash may be tied up for at least 90 days. I save monthly, but invest in the market quarterly in order to save on commissions. I wanted to find a place to park cash where I could 1) get a decent rate of return and 2) be able to get to the cash fairly quickly.
I discovered TreasuryDirect.Gov (click here). As the name suggests, at TreasuryDirect you buy treasuries directly from the government. The account is fairly simple to set up with some paper work that must be signed by your bank. Once the account is set up you are able to buy T-Bills, T-Notes, Savings Bonds, etc. directly from the government. In using TreasuryDirect, you pay no commission so all the interest earned is yours to keep. I personally buy 4 Week T-Bills so that my cash is tied up for only 28 days. The yield this week was 4.75% on a 4 week T-Bill. Not bad for these uncertain times.
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