Where can I get a better rate than my bank savings account?
The government! Yes, the United States of America has this neat little product called treasury bills, or T-bills, that are short-term investments you purchase in increments of $1,000 at a discount from its face value, and then receive the full value when it matures (they go for 4, 13, and 26 weeks). Think of it like the savings bonds you got for your Sweet 16 but with a quicker return. You can buy a $1,000 T-bill for $970 and earn at least $30. That doesn’t sound like enough to save up for a new car, but when you start buying them in the thousands, you’re ensured a profit within a specific time frame -- which is a lot more than the money sitting in your savings account can do. And since it’s a product of the federal government, you won’t be required to pay state taxes on your profits. The only rules: You have to buy at least $1,000, and if you sell before it matures, it’s for less of a profit. Check out Treasurydirect.gov for the recent history of rates. If you want to make a purchase, the government will sell them to you without a fee (what a novelty!) but you do need to do the minor legwork. Banks and brokers can also handle it but it will cost you.
-- Alonna Friedman