Rolling over my 28-day T-bills from September

Since I purchased my last batch of 28-day T-bills over three weeks ago, it's almost time for them to mature and to roll the proceeds over and buy a new batch on the next weekly T-bill auction on Tuesday using the TreasuryDirect online system. All of this is happening automatically, but I am curious what interest rate I'll get since it depends of the demand at the auction. I'll know on Tuesday afternoon when the T-bill auction results are published.

My current T-bills were issued on Thursday, August 31, 2006 and mature this Thursday, September28, 2006. Their investment rate (uncompounded annual yield) was 5.19%. The interest rates on the 28-day T-bills for the three weekly auctions since then have ben significantly lower at 4.88%, 4.76%, and 4.72%.

If demand is higher, I'll get a lower rate. If demand is lower, I'll get a higher rate. Lately, demand has been much higher as money has flowed dramatically out of commodities, but I suspect that the flows will begin to diminish soon. Still, I am prepared for the fact that I might get a rather mediocre return, in the range 4.65% to 4.90%.

The proceeds from my maturing T-bills will be credited to my bank checking account sometime on Thursday and the debit for the new purchase will hit shortly thereafter. At least that's what happened last time. I have enough cash in my bank checking account to cover any skew in the credit and debit order. The net effect will be that the accrued interest will be deposited in my bank checking account.

-- Jack Krupansky