Someone asked me about T-bills

I learned something on Facebook a year or so ago: I found out there was something called T-bills.  Two of my friends were discussing how small an interest you get on a savings account, and one mentioned T-bills.  I had no idea what they were talking about, so I searched with Google and "sort of" figured out what it was.  The way I see it, you loan some money to the government to use for three months, six months, nine months, or a year.  At the time I found out about T-bills, the interest was well over 5%, which is, in a way, better than what CD's were doing.  I've never been an investor except when I had a 401K at Kohls DC, but when I found out I could get 5% on an amount as low as $100 without going through a bank or investment advisor, I was sort of curious about it.  Wouldn't it be fun to invest $100 dollars to see how things worked out?  Even if I did something crazy and lost it, it wouldn't kill me, and if everything worked like it should, I'd get it back in three months with interest.

So I made an account at Treasurydirect.gov. and invested 100 bucks for three months, just to make sure I could do it.  The money came directly out of our bank on whatever day I scheduled it for.  I did tell Cliff what I was doing.  He wasn't very happy about it, but I told him I just wanted to see how it worked.  Three months later, my money was back in the bank with a tiny bit of interest.  Five and-a-half interest on a hundred dollars for three months obviously won't make you or break you, but that's the way I learned how this all works.  

Since then I've put larger amounts in and left them longer.  We are living on Social Security, so I try to space the T-bills so we will get the money back when we need it most, like for auto insurance, or propane in the winter.  When a little extra cash is left at the end of the month, I put it in a savings account.   When there's enough in savings to buy a $500 T-bill, I get one.  I'm not trying to get rich; I'm just trying to get some extra money coming in when we most need it. 

You can't get your money back from T-bills until the time is up and it comes back into your bank account, unless you go through an advisor to do it for you. He will try to sell your T-bill to somebody else and give you your money back without some of the interest your money earned.     

Here's something you should know if you want to play around with T-bills like I do.  When CDs are up, T-bills are often down, and visa versa; CDs have compound interest, unlike T-bills; but then, you can't get a CD for $100, either.

I don't know if anybody else cares about this, but a friend wanted to know.  It isn't the first time I've written a blog entry for just one person.