Mr. ODA has been investing in short term savings bonds through Treasury Direct. Per their website: TreasuryDirect.gov is the one and only place to electronically buy and redeem U.S. Savings Bonds. By purchasing directly from the government, you ensure legitimacy of your purchase, and establishing an account provides simplicity for the purchase and ownership of the bonds.

Mr. ODA had already purchased a Series I savings bond over a year ago, and he wrote a post about it. The $5,000 purchase is now worth $5,440.

Mr. ODA has now expanded to marketable securities, which are defined as any unrestricted financial instrument that can be bought or sold on a public stock exchange or a public bond exchange. The United States Treasury offers five types of Treasury marketable securities: Treasury Bills, Treasury Notes, Treasury Bonds, Treasury Inflation-Protected Securities (TIPS), and Floating Rate Notes (FRNs).

We’ve now been buying short term treasury bills, which are offered from 4 week to 52 week terms. The bills are sold at a discount and it’s paid at face value. For example, Mr. ODA purchased a $10,000 bill; $9,958.93 was pulled from our account. At the end of 4 weeks, two deposits will be made of $9,958.93 and $41.07. You can set it up to reinvest itself, so then it’ll only pay out the “interest” portion.

There’s a minimum purchase of $100, and it needs to be purchased in $100 increments. The interest rates are “fixed at auction,” and are the difference between what you paid and the face value you get when the bill matures.