TreasuryDirect emergency fund

Wednesday, November 3rd, 2004
Categorized as: Treasury Direct

I have just started to use Treasury Direct as an alternative to a traditional savings account. Because I have to hold securities for a one-year minimum, should I keep some money in the Zero Percent Certificate of Indebtedness for the first year, as an emergency fund, and then invest it when the first few securities become redeemable?

Tom’s response

I think an emergency fund is a reasonable way to use a Zero Percent Certificate of Indebtedness.

Although I’m sure some financial advisors would argue that you should try to earn interest on all of your funds, a C of I has the advantage of tucking your money away where you can’t easily spend it.

If you need it for an emergency, however, you can log on to your TreasuryDirect account and transfer some or all of the money from your C of I to your bank account.

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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:

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June 1, 2010

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Tom Adams

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