Now this is just a drill, just a drill, time to cash in T-bills from one of my T-bill ladders. Where I house most o my Emergency Fund. However, what if I needed my emergency fund, and much of it was locked up in a T-bill ladder? Is it easy to cash t-bill ladders?
Well, that is the plan, lets find out if there is a need for my Emergency fund, and how to access it since it’s invested in treasury bills. Time to test, can I cash in my treasury bills during a time I need my emergency fund?
How I Built My T-Bill Ladder Emergency Fund.
Older posts give more details I planned and built my first t-bill ladder. I only used a few hundred dollars, (4 x $100 t-bills) staggered a week apart, with auto reinvestment turned on.
It worked, so I put most of my 6-month emergency fund into more T-bill ladders I built. Building these T-bill ladders became easier with each one, the only hiccup is not having more money to invest.
How Can I Access My T-Bills Emergency Fund?
Well, building t-bill ladders wasn’t so hard looking back, but one thing I’ve not done yet is getting my money back. Divesting in t-bills and getting cash flowing back into my bank accounts.
So, here it is, this is a drill and only a drill, I need access to my Emergency fund.
Emergency Fund Scenario – Cash In T-Bills.
Not going to go into too much detail here, but imagine I lost my job. I have a small amount of cash locked up in a High Yield Savings Account and this is my Fast-Cash. This fast-cash is easy to access and not too much of a test.
The goal for this fast-cash is to cover the first couple weeks of losing an income, and it’s there and easy to get to.
Now after a few weeks, the fast-cash will run out and I need access to my later months(2-6 months of expenses) locked up into a couple t-bill ladders. So at start of the emergency, time to cash in T-Bills asap.
NOTE: This is a test, so only turning off one of my T-Bill ladders, the very first one I created, allowing the rest of the money to continue to work as one of my passive income generators. However, what I do here should apply to the rest of the T-Bill Ladders I built.
How To Cash In Treasury Bills?
Now let’s talk about the harder way to get your cash from treasury bills, you can sell them on the open market and get what buyers are willing to pay for them.
To get the T-bills from TreasuryDirect for selling, those t-bills have to be transferred to a platform that can sell t-bills since Treasury Direct doesn’t have the means.
As you can tell, this is a complicated task and if buyers don’t want your t-bills, you can lose money in this process. So I planned around NOT doing this.
My T-Bill ladders were built with staggered maturity dates, about a week apart. My emergency fund is divided into portions allowing access to my cash by allowing the T-bills to mature naturally. This way I don’t have to wait more than a week for the cash to start flowing back into my bank account.
I planned not to sell my T-Bills, but let them mature. If this was a true emergency, I want to keep things simple. So let’s see if cashing out this way is truly simple.
My Steps: Cash In My T-Bill Ladder Emergency Fund.
1: Go to the Treasury Direct website: https://www.TreasuryDirect.gov
2: On the website’s home page I clicked on ‘Log In’.
3: On this intermediary page, I clicked on ‘Next’
4: On the account page, I entered my account number and clicked ‘Submit’
5: On the two-factor verification page, enter my OTP(one-time passcode), they sent an email to my registered account, and click ‘Submit’.
6: Once verified, I entered my password, and clicked ‘Submit’
7: Got to a personal information page, where I verified my information and clicked ‘Verify’.
8: Made it to my Dashboard. While on the dashboard, click ‘MARKETABLE SECURITIES’.
9: I selected “Treasury Bills” for my Security Type and clicked “Submit”.
10: I saw all my securities Select the treasury bill you want to modify, and then clicked “submit”.
11: I saw the Treasury Bill’s information, bank information, rate, reinvestments, etc. Then I clicked ‘Edit Reinvestments’.
12: In the ‘Number of Reinvestments’ text box, I entered ‘0’ (zero), and clicked “Submit”.
13: This treasury bill’s information was presented again, and this time with ‘number of reinvestments’ as ‘0’ zero. I clicked “Return”.
14: I saw all my treasury bills, and then selected the next treasury bill I wanted to modify. Then click “Submit”.
15: I continued to select, modify, and submit, till all the treasury bills I wanted to change were changed.
16: Once all the t-bills have been modified to no longer do reinvestments, I just “Logoff”.
This T-Bill Ladder Goal:
Now to continue with the idea of this drill, I need my Emergency Fund to support my family till I get back on my feet, on day one continue to use fast cash. But turn off reinvestments on all my t-bills of my Emergency fund.
As my fast-cash dwindles away, hopefully not too fast, each week(using this t-bill example) a t-bill will mature and the cash will be deposited into my banking account
What If The Emergency Ends Before 6 Months?
Well hopefully this is true, any remaining cash will be used to rebuild my 6-month emergency fund again. No need to cash in T-bills forever, I can rebuild my T-Bill ladders.
It took a while before, but now I have the benefit of hindsight, and with perseverance and keeping focused I can return to the sense of security I had having a fully funded emergency fund.
Cashing In T-bill Ladder Test Done?
No, I just turned off auto reinvestments on the T-Bills, will take about a month to fully test if each T-Bill matures and gets deposited into my account.
Now this isn’t an immediate cash in T-Bills, the money will slowly, only weekly basis times four weeks with this four-rung T-Bill ladder, so it’s gradual. For me, this is better since I’m not overwhelmed by a large lump of cash showing up in my bank. It’s a gradual way for me to cash in T-Bills.
Once done, will update you guys and hopefully for all of us, this is just a test, not a true Emergency.
Thank you!
[Update] T-Bills In Emergency Fund Cash Out:
Sorry for the delay, but I had to wait till the last T-Bill matured to truly test this.
Well, it worked! After I turned off the T-Bill Reinvestment option, set to zero (“0”), as each T-Bill matured, the money was deposited into my banking account.
If this was a true Emergency, something my 6 Month Emergency Fund was designed for(like loss of job/income), the fast cash would be in my bank account’s HYSA. I use Sofi Banking since I get a higher interest rate on my savings account, driving the yield to a High Yield Savings Account level.
Well, I am blessed, and this was just a test. My Emergency Fund money was returned to me, and now I’m going to re-set up the fund so that it’s simplified and I can set it and forget it—the point of using a T-Bill Ladder for my Emergency Fund.
If you have questions or comments please leave them below. Doing a test like this helps ensure should a stressful day come where I lose my job, I can soften the blow by planning ahead. Thanks!
 Myself with an interesting Bull Sculpture. Notice: No Lambo’s. :/ | Hi I’m Tom, A Blogger And A PIG Farmer. PIG Farmer as in I grow Passive Income Generators(PIG’s). I’ve been playing with stocks, mutual funds, and options for decades, as well as always working on my side hustle stacks. Unlike what you read online, I’ve yet to find a way to get rich quickly. Get Rich Quick isn’t happening for me. My journey has been long and continues. I hope to have so many PIGs I can stop working at my current job and volunteer as a medical worker overseas. Still waiting, but getting there. I still am a family man, and while on this Journey of Growing PIGs. I wanted to share my adventures(ups and downs), hoping you will contribute with your feedback and comments. Fun Fact: In my spare time, I am a Band-Dad! |