Zero Percent Certificate of Indebtedness as an investment

Wednesday, October 27th, 2004
Categorized as: Treasury Direct

In what investment situations would you use the Zero Percent Certificate of Indebtedness (C of I) account in Treasury Direct?

Tom’s response

The Zero Percent C of I isn’t meant as an investment, but just as a temporary holding area for money you have deposited into your TreasuryDirect account.

You can move money into a C of I by selecting that option when redeeming a TreasuryDirect security, by scheduled deposits from a payroll savings plan or other type of scheduled investment, or by making a transfer from your bank account.

You can move money out of a C of I by buying a Savings Bond or making a transfer 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:


On March 26th, 2009 Rick said:

Hi Tom. Are Zero-Percent C of I just as safe and secure as short term Treasury Bills are? What’s to prevent a person from just leaving funds into a Zero-Percent C of I for a long period of time? It seems to me that with the low interest rates that short term T-Bills are yielding now, one could just as well leave funds into a Zero-Percent C of I and have an apparent advantage of having a more liquid investment as opposed to keeping funds into short term T-Bills.

On March 30th, 2009 Tom Adams said:

Rick – brilliant analysis! You’re right – the C of I gives you more liquidity with hardly any interest rate penalty. The safety is the same as any other government security.

Tom Adams

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June 1, 2010

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