Comments on: Why Use Zero-Percent Certificates of Indebtedness? http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html personal finance blog with anecdotes, advice and commentary. Sun, 12 Feb 2012 23:30:41 +0000 hourly 1 By: Ron http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html/comment-page-1#comment-356672 Ron Sun, 24 Oct 2010 18:38:30 +0000 http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html#comment-356672 For emergency use by the federal gov't to create debt free note to pay off debts For emergency use by the federal gov’t to create debt free note to pay off debts

]]> By: Laura http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html/comment-page-1#comment-349155 Laura Wed, 07 Jul 2010 20:15:16 +0000 http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html#comment-349155 I have the same question. Why should I put my money in a C of I that earns 0 interest when I can put it in a saving that will earn at least 2%? I am lost. I want my paper bonds back. I have the same question. Why should I put my money in a C of I that earns 0 interest when I can put it in a saving that will earn at least 2%? I am lost. I want my paper bonds back.

]]> By: Greg http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html/comment-page-1#comment-329059 Greg Tue, 13 Oct 2009 18:35:17 +0000 http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html#comment-329059 Suppose you have a billion dollars and you don't want to risk it in the Stock Market, and you don't want to put it all in a single bank account (it's only FDIC insured to $250,000 at present), and you don't want to open dozens of bank accounts, and you don't want to buy loads of precious metals, etc, etc... The Zero Point Certificate is not for schmoes like most of us. It is an appropriate and safe means of "banking" large sums of money for very wealthy people who are not looking for risk of any kind. (AND your funds are available for Treasury Note and Bond purchases). Suppose you have a billion dollars and you don’t want to risk it in the Stock Market, and you don’t want to put it all in a single bank account (it’s only FDIC insured to $250,000 at present), and you don’t want to open dozens of bank accounts, and you don’t want to buy loads of precious metals, etc, etc…

The Zero Point Certificate is not for schmoes like most of us. It is an appropriate and safe means of “banking” large sums of money for very wealthy people who are not looking for risk of any kind. (AND your funds are available for Treasury Note and Bond purchases).

]]> By: Brian http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html/comment-page-1#comment-224877 Brian Thu, 20 Mar 2008 00:39:47 +0000 http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html#comment-224877 The answer is, when you roll over your treasury bill, you will get an ACH credit for the maturing bill AND an ACH debit for the new bill in your bank account, rather than a credit for the interest. Thus, for each T-bill that matures, you need an additional $1,000 in your bank account to cover it. With the Zero C of I, it just drops the interest differential there without the bank account hit. The answer is, when you roll over your treasury bill, you will get an ACH credit for the maturing bill AND an ACH debit for the new bill in your bank account, rather than a credit for the interest. Thus, for each T-bill that matures, you need an additional $1,000 in your bank account to cover it. With the Zero C of I, it just drops the interest differential there without the bank account hit.

]]> By: Gary Boswell http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html/comment-page-1#comment-2228 Gary Boswell Sun, 04 Dec 2005 13:39:58 +0000 http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html#comment-2228 This appears to be an example of level of intelligency of our Federal Government. The normal accounting procedures used by the government would never fly anywhere else. They believe that this is a great idea. That way they can use that money until you officially give it to them by purchasing a US Saving Bond. I myself can see no reason why I would want to put money into this type of account when I could deposit it into a savings account. .025% is still more then Zero. This appears to be an example of level of intelligency of our Federal Government. The normal accounting procedures used by the government would never fly anywhere else. They believe that this is a great idea. That way they can use that money until you officially give it to them by purchasing a US Saving Bond. I myself can see no reason why I would want to put money into this type of account when I could deposit it into a savings account. .025% is still more then Zero.

]]> By: MyMoneyBlog http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html/comment-page-1#comment-1710 MyMoneyBlog Sun, 30 Oct 2005 03:43:28 +0000 http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html#comment-1710 I figured it was something their lawyers came up with. They are technically not a bank so it's not a savings account, but I agree a better term should have been thought up. I figured it was something their lawyers came up with. They are technically not a bank so it’s not a savings account, but I agree a better term should have been thought up.

]]> By: Caitlin http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html/comment-page-1#comment-1682 Caitlin Thu, 27 Oct 2005 00:30:33 +0000 http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html#comment-1682 Yeah I was wondering the same thing. Too bad they can't add some nominal interest, then it might at least be worth one less step but 0 compared to 4% is pretty steep. I'd rather "collect" it in Emigrant or ING and make a purchase when I'm ready via ACH. Yeah I was wondering the same thing. Too bad they can’t add some nominal interest, then it might at least be worth one less step but 0 compared to 4% is pretty steep. I’d rather “collect” it in Emigrant or ING and make a purchase when I’m ready via ACH.

]]> By: Dave http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html/comment-page-1#comment-1677 Dave Wed, 26 Oct 2005 13:20:27 +0000 http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html#comment-1677 While for people as financially sophisticated as those who would read this blog it would seem rather silly to have your money in a non-interest bearing account, there is a very large percent of the population that keeps most of there day-to-day funds in such accounts. The regular savings/checking accounts at most large mainstream banks are essentially interest free (I do not consider 0.25% to be interest!, not with inflation around 3.5-4%) The only real benefit that I can see for this is a psychological one, if you (say) but 10% of your paycheck into this account and then 'forced' yourself to save with it. But yeah, I think it would be silly, I'd far prefer to keep all my funds in a 4% checking account and use that to make purchases when I need them. While for people as financially sophisticated as those who would read this blog it would seem rather silly to have your money in a non-interest bearing account, there is a very large percent of the population that keeps most of there day-to-day funds in such accounts. The regular savings/checking accounts at most large mainstream banks are essentially interest free (I do not consider 0.25% to be interest!, not with inflation around 3.5-4%) The only real benefit that I can see for this is a psychological one, if you (say) but 10% of your paycheck into this account and then ‘forced’ yourself to save with it. But yeah, I think it would be silly, I’d far prefer to keep all my funds in a 4% checking account and use that to make purchases when I need them.

]]> By: denon http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html/comment-page-1#comment-1668 denon Wed, 26 Oct 2005 00:23:12 +0000 http://www.bargaineering.com/articles/why-use-zero-percent-certificates-of-indebtedness.html#comment-1668 I have absolutely no clue, but I wondered this myself. I wondered if there was any tax advantage, though I highly doubt it. I also wondered if it could more easily be borrowed against than a normal liquid asset, but that seems a little odd. The only thing I could really come up with, is that I suppose in theory, this money would be safer than an FDIC-insured bank. After all, the FDIC could go under, but odds are govt bonds would remain the same. In reality, I think it's just a fancy name for their internal credit memos, as I know that's also what happens to money that fails an ACH transfer or such. It has to go somewhere, and since you don't have an "account" with them persae, it goes into these certificates. Other brainstorms? :) I have absolutely no clue, but I wondered this myself. I wondered if there was any tax advantage, though I highly doubt it. I also wondered if it could more easily be borrowed against than a normal liquid asset, but that seems a little odd. The only thing I could really come up with, is that I suppose in theory, this money would be safer than an FDIC-insured bank. After all, the FDIC could go under, but odds are govt bonds would remain the same.

In reality, I think it’s just a fancy name for their internal credit memos, as I know that’s also what happens to money that fails an ACH transfer or such. It has to go somewhere, and since you don’t have an “account” with them persae, it goes into these certificates.

Other brainstorms? :)

]]>