Don’t look now, but interest rates are at a more than three-year high. Short-term interest rates that is. The yield on three year treasury notes has crossed the 1% threshold. I know, a 1.08% yield for three-year paper is nothing to brag about, but it could be worse. From late-2011 to mid-2013, the average yield on three-year treasury notes was 0.35%. Do you know how long it takes to double your money at a 0.35% interest rate?
I’m going to tell you. It takes 199 years. If you are putting away money for the grand kids, better change the will to make it your great, great, great grand kids. At a 1.08% rate, it takes about 65 years to double your money. Still a long-time, but a monster improvement from the 199 years at a 0.35% rate of return.
For retired investors and savers there is finally some light peaking through at the end of the tunnel. It has been a long, hard slog. Here’s to hoping this uptrend in Treasury yields continues.
Jeremy Jones, CFA
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