I have a significant amount of student debt ($90k), and I have been stashing money away in a high yield savings account until the payment pause ends (which is 60 days after the resolution of the student loan litigation, which from my understanding will likely be in June). When the pause ends, I will use whatever is in the account to start paying off the loans.
However, I’ve noticed that I can get slightly better rates with short term Treasury notes. For example, the current annual yield on a 4 month Treasury note is 5.11%. My current HYSA is 3.5% (I understand there’s better rates out there, but I haven’t seen any as high as the T-notes). Plus, as somebody living in NYC, being exempt from state taxes would definitely be an added benefit.
Is there any reason not to shift the money into short term Treasury notes?
Side question: how much risk are T-notes in if the debt ceiling isn’t raised? It seems the market thinks it’s extremely likely a deal will be reached (and thus avoiding default), but if not, would the funds be at risk? Or would it be likely the government would ultimately pay it off (even if it might be a bit late?). Just curious as it seems the debt ceiling might be reached sometime this summer — e.g., around when student loan payments might begin and when I’d be looking to shift money out of the T-bonds