Why Buy Stocks When T-Bills Pay 4%? Jim Cramer’s Blunt Answer

A caller on the June 29 episode of Mad Money framed a question that has nagged at retail investors for the better part of two years. “If I can get a guaranteed interest rate of over 5% by purchasing a 6-month Treasury bond, why should I invest in the equities market given market conditions?” Jim Cramer did not laugh it off. He owns short-dated paper himself. But he also thinks the framing quietly costs people money, and recent events have made his answer worth revisiting.

The premise in that caller’s question has already been overtaken by events. The 5% guaranteed return on short Treasuries vanished months ago, then crept partway back. The 6-month T-bill now yields roughly 4.29%, a level that climbed sharply after markets began pricing in a tighter Fed. That shift got official confirmation on September 16, when the Federal Reserve raised its benchmark rate by a quarter point to a target range of 3.75% to 4.00%, its first hike in more than three years. The 10-year benchmark sits near 5.00%, and the 30-year bond yields approximately 5.33%. So the debate has sharpened considerably: a 4%-plus short-term bill on one side versus a long bond that actually pays more but carries real principal risk on the other.

Looking ahead, the Fed is widely expected to hold at its October 27-28 meeting, with roughly 83% of futures traders pricing in a pause as of late October. The action has shifted to December: the September dot plot showed officials’ median year-end forecast at 4.1%, implying one more quarter-point hike. Fed Chair Kevin Warsh has declined to preview the decision. With U.S. CPI running at 3.7% year over year in September, the case for another move before year-end remains live.

Cramer’s verdict, and why it still holds

Cramer validated the safety trade, then flipped it. “The stock market has far exceeded longer term anything that you’re going to get in the short.” His point is mechanical. A T-bill locks in a coupon for six months. When it matures, you reinvest at whatever rate the market offers that morning. The Fed’s September hike, combined with the signal of a possible second hike in December, makes that reinvestment outcome less predictable, not more. The coupon on the bill you buy today is real. The coupon on the bill you roll into six months from now is anyone’s guess.

The second half of Cramer’s argument is compounding. “No growth on any treasuries,” he said, and that observation deserves careful reading. A bill pays you a coupon and returns your principal intact. A quality dividend grower pays a coupon, raises that coupon most years, and lets the underlying business appreciate over time. These are two vehicles built for two entirely different jobs, and treating them as interchangeable has a cost.

How Enbridge and ONEOK illustrate the point

Cramer named two pipeline operators as illustrations, not recommendations.

Enbridge (NYSE:ENB | ENB Price Prediction) trades near $47 per share with a trailing yield of roughly 5.9%. That starting income already beats the 6-month bill by more than a percentage point and a half, before any growth is factored in. The Canadian pipeline operator delivered its 31st consecutive annual dividend increase with a 3% raise declared in December 2025, lifting the quarterly payout to $0.97 CAD per share and the annualized rate to $3.88. Management has guided to roughly 5% compound annual growth in EBITDA, earnings per share, and distributable cash flow after 2026. In September 2026, Enbridge launched a CDN$2.6 billion bought-deal equity offering to fund acquisitions, which briefly pressured the share price and widened the yield for new buyers. The stock’s 52-week range of roughly $45 to $58 captures the real tradeoff: holders had to absorb a meaningful drawdown before recovering.

ONEOK (NYSE:OKE) tells a similar story with a different shape. Shares trade near $96, the forward yield sits around 4.5%, and the quarterly payout stands at $1.07 per share, confirmed by the board on October 14. ONEOK completed a major strategic move on October 6, closing its $4.425 billion acquisition of Brazos Midstream’s Permian Midland Basin natural gas gathering and processing assets. The deal, funded through a $9 billion nonvoting minority equity investment from Apollo funds, more than doubles ONEOK’s processing capacity in the Midland Basin and is expected to be immediately accretive to earnings and free cash flow per share. Roughly 90% of earnings are fee-based, meaning the cash flow supporting the dividend does not swing materially with daily oil prices. The stock’s 52-week range runs from about $64 to just under $100.

The illustrative math looks like this. Park $10,000 in a 6-month bill at roughly 4.30% and you collect about $210 over the term, then face whatever reinvestment rate is available in April. Put the same $10,000 into a roughly 5.5% yielder growing its dividend around 4% a year, and year-one income lands near $550, with a raise already built into year two. You carry price risk in both directions with the equity. That is the trade Cramer is asking investors to see clearly.

The variable that decides it for you

The single factor that settles this decision is time horizon, specifically whether you can absorb drawdowns without being forced to sell. If you need the principal back in eight months for a house down payment, a T-bill wins. The certainty is the product, and no dividend yield changes that calculus. If your money has five years or more to work, the picture inverts. Both Enbridge and ONEOK have produced total returns over multi-year periods that no bill ladder was going to match.

Volatility is the price of admission. Enbridge’s 52-week low sat near $45. ONEOK spent months below $70 before rallying toward $100. If those kinds of swings would force a sale at the wrong moment, the stocks should not be in the portfolio regardless of yield differential. One added complication: the September Fed hike has pushed borrowing costs higher across the economy, and the December meeting keeps at least one more hike in play. That matters for pipeline operators because their capital costs and refinancing terms move with broader rates, even when their operating cash flows stay relatively stable.

What to actually do with this information

Start by separating the dollars you will spend inside a year from the dollars that can compound over time. The near-term bucket belongs in bills at whatever the current auction clears. The long-term bucket carries a real opportunity cost if it sits in cash equivalents indefinitely.

For any dividend name you consider, check three things: the payout ratio against free cash flow, the streak of consecutive annual increases, and the dividend growth rate over the last five years. A 4.5% yield growing 4% a year quietly outruns a short-term bill that you must renew at an uncertain rate every six months.

The T-bill solves for six months. Dividend growers solve for the next decade. Cramer’s answer is really just a reminder that those are two different questions, and the Fed’s return to hiking makes the distinction more relevant, not less.

Editor’s note: This pass updates the 6-month T-bill yield to approximately 4.29%, the 10-year Treasury yield to approximately 5.00%, and the 30-year yield to approximately 5.33%, all as of late October 2026. It also refreshes Enbridge’s share price to approximately $47 with a trailing yield near 5.9%, updates ONEOK’s share price to approximately $96 and its dividend declaration date to October 14, 2026, and adds ONEOK’s completed $4.425 billion acquisition of Brazos Midstream’s Permian Midland Basin assets (closed October 6, 2026), along with the October FOMC hold expectation and December hike risk.

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