Treasuries vs. CDS - How about a MYGA instead? by Scott Stolz, CFP, RICP (week 52)
Charles Schwab recently published an article entitled “CD or Treasury? 5 Factors to Consider” ( CD or Treasury? 5 Factors to Consider | Charles Schwab ). I’ve never owned either in my life, and I probably never will, but I was still curious to read about how they positioned these two safe money alternatives against each other. The article contained the chart below comparing yields on both options at various maturities. Given the similar yields, I was not surprised that the article focused mostly on the differences in liquidity and taxes. Since treasuries can be more easily bought and sold and are also exempt from state income taxes, Schwab gave a slight advantage to them over CDs. In the end, their advice was to build a ladder of various maturities no matter which option you chose. The article also correctly advised investors to hold “…a CD or Treasury to maturity.” While I have no issues with the analysis outlined in ...