Are treasuries better than CDs?

The benefits of both CDs and Treasuries are that they can generate income, protect your principal, and help diversify your portfolio. Additionally, Treasuries can have tax benefits when compared to CDs. However, CDs and Treasuries are fixed income investments and subject to similar risks as other fixed income investments.

What is the difference between a treasury and a CD?

It is generally very easy and low cost to buy or sell Treasuries. CDs are a slightly different story. CDs offered by banks directly to consumers are generally illiquid. Investors typically buy a CD for a certain term directly from the bank and there is often an early withdrawal penalty.

What is the difference between CDs and Treasury bonds?

Here lies a key difference between CDs and Treasury bonds. The interest earned on CDs is subject to state and local taxes. In contrast, interest earned on Treasury bonds is exempt from state and local income taxes, potentially offering significant savings for investors in high-tax states.