I’m writing today with 3 Ways to Profit From High Interest Rates. At the moment interest rates for short term treasury bills of 2 years or less are over 5%. I even got an e-mail from Ray Dalio, creator of Bridgewater Hedgefund, that recommends getting into cash investments.

Treasury Bills guarantee the money you invest, they are easy to invest in and now you make a pretty solid return. I’ve also heard that it is likely that rates will go up again at the end of the year.

If you are hurting watching your stocks and bonds sink in value, and you’ve notice that since their highs in 2021 that they have not recovered, then you may want to understand that there are other ways to invest. You can take all or at least a substantial chunk of your investments and watch them grow every month at over 5%.

How would that feel?

#1 Buy Treasury Bills from Treasury Direct

As an individual in the United States you can open an account directly with the U.S. treasury and invest in T-Bills there of various short term durations. You might want to check when the next Fed meeting is and time it so they mature around then. That way you can get new T-Bills at a higher rate if they do in fact raise interest rates again.

It’s easy to open an account. Just go to the website TreasuryDirect.gov and follow the instructions. When you have an account, just go purchase T-Bills. You can purchase them in $100 increments. You will be given the average price that is determined through the weekly auction.

You will link a bank account that will debit the amount of the Bill when you the auction is complete.  If you bid for $100 T-Bill, it costs less than $100 because they give you the interest when it matures.  There is a math formula to determine the actual amount of interest per the interest rate and the time to maturity but basically you will be buying a 15 week T-Bill for around $97 and getting $100 when it matures.

If you want step by step video instructions click here.

#2 Buy Treasury Bills from your Brokerage account

Another way for an individual to buy T-Bills is through an online brokerage account such as Schwab.  I have both Etrade and Schwab and I have found that Schwab is easier if you have smaller amounts of money to invest.

One of the downsides is that the minimum order is $1,000, so you need more money to start.  In Schwab it’s pretty easy to find $1,000 options, but in Etrade I found you need to have a minimum of $50,000, making it not really sustainable for me.

An advantage of using Online Brokerage accounts like Schwab is that if you want to sell your T-Bills before they mature you can, though they are of such short duration you probably won’t need to.

Again, when you purchase T-Bills, you will be paying a lower price than $1,000.  You will get $1,000 when they mature.  The brokerage account automatically calculates the Anualized Rate for you so you can compare options.

#3 Deposit money into an online High Yield Savings Account

High Yield Savings accounts are either at the same rate as US Treasury Bills are up to 1% lower. This is due to the fact that they make a profit from the difference. They are helping you automatically reinvest in treasuries, which does require some skills and time.

I have both High Yield Savings Accounts and U.S. Treasury Bills, mainly because high yield savings accounts are so easy and I also had one before I understood how to invest directly into U.S. Treasury Bills.