For the last few years, I found that T-bills yielded better than CDs and better than the various cash savings accounts. So I regularly bought T-bills twice each week (of all the various types, 4-week, 6-week, 8-week, 13-week, 17-week, 26-week, and 52-week, and the occasional odd cash management issue) to create an extremely gradated ladder with maturities occurring twice each week. But over the last few months, I noticed that CDs are yielding better than T-bills, so I switched to CDs instead. In my case, living in a state without an income tax, CDs are nearly equivalent to T-bills, certainly yield-wise, but also safety-wise if you consider FDIC close enough to full-faith-and-credit.
Now comes the problem. CDs are a LOT more work than treasuries. For the treasuries, I simply placed orders each week after the issue was announced and had become available for orders. No thinking or searching involved, it literally took 60 to 90 seconds twice a week. And then the T-bill auction would occur, and after each auction, I would note the rate that I received. For CDs, it’s much different. I need to search for all the CDs, then I need to find the “best” rates, and then I need to approximate the closest date that I want. It’s kind of a hassle and takes 5-10 minutes every day or two. But I’m regularly seeing CD yields about 0.15 - 0.2% better than T-bills. Lately I’ve been snagging CDs yielding 3.90% and one even at 3.95%. There is a distinct risk that rates go up a bit this year, so I haven’t gone further out than a year for now.
The cash has to sit somewhere, so it may as well be whatever is highest yielding at the time.
