Calculate T-bill discount rate and investment yield. Includes 2026 rates, auction guide, T-bill ladder strategy and HYSA comparison. Calculator4U
Calculate T-Bill yields and returns.
A Treasury Bill calculator computes the discount rate and investment yield for US government T-bills — the world's safest short-term investment, backed by the full faith and credit of the United States government. As of May 2026, the 13-week T-bill yields approximately 4.1% and the 26-week yields approximately 3.9% — fully exempt from state and local income taxes. In California, New York, or any high-tax state, a 4.0% T-bill yield is equivalent to a 4.30% to 4.59% fully taxable yield — beating most high-yield savings accounts on an after-tax basis. Use Calculator4U to find your exact yield and tax-equivalent return.
The critical distinction most investors miss: T-bills are quoted using the Bank Discount Rate based on a 360-day year, but the Investment Yield uses a 365-day year and is always higher — and is the correct number to compare with savings accounts and CDs. A T-bill with a 4.95% Bank Discount Rate has a 5.07% Investment Yield — that 0.12% difference matters when comparing alternatives. Always use the Investment Yield, also called the Coupon Equivalent Yield, for accurate comparisons with other fixed-income instruments.
T-bills use two yield formulas. Bank Discount Rate equals (Discount divided by Face Value) multiplied by (360 divided by Days) — used for secondary market quoting. Investment Yield equals (Discount divided by Purchase Price) multiplied by (365 divided by Days) — more accurate for comparing to other investments. For a $10,000 T-bill purchased at $9,875 for 91 days: Bank Discount Rate equals 4.95%, Investment Yield equals 5.07%. Always use Investment Yield when comparing T-bills to savings accounts, CDs, or money market funds.
Yes for safety, short-term cash parking, and high-tax state residents. T-bills offer zero default risk as direct US government obligations, state and local tax exemption worth 0.3% to 0.7% extra yield in high-tax states, and current yields of 3.7% to 4.3% across maturities as of May 2026. They beat most savings accounts on an after-tax basis for residents of California, New York, New Jersey, and other high-tax states. Best for emergency funds, short-term savings goals, and cash awaiting deployment into longer-term investments.
Buy at TreasuryDirect.gov with no fees or commissions — the only fee-free option. Open an account with your SSN and bank routing number. Submit a non-competitive bid before the auction deadline: Monday for 4, 8, and 17-week bills; Tuesday for 13-week and 26-week bills; Thursday for 52-week bills. Minimum purchase is $100. Maximum non-competitive bid is $10 million per auction. Enable auto-reinvestment to automatically roll maturing bills into new ones at current rates — ideal for T-bill ladder strategies. Alternatively buy through brokers like Fidelity, Schwab, or Vanguard with slightly more flexibility for secondary market trading.
T-bills and HYSAs offer similar yields in May 2026, but T-bills win on an after-tax basis in high-tax states due to state and local tax exemption. In a 7% state tax rate, a 4.0% T-bill equals a 4.30% taxable equivalent yield — beating most HYSAs. Key trade-off: T-bills lock your money for a fixed term while HYSAs offer daily liquidity. For money you won't need for 4 to 52 weeks, T-bills are typically the better choice for high-tax state residents.
A T-bill ladder staggers purchases across multiple maturities so bills mature at regular intervals for both yield and liquidity. Example with $20,000: buy $5,000 each in 4-week, 8-week, 13-week, and 26-week T-bills. Every 4 weeks a bill matures and you reinvest at the current rate — capturing rate increases automatically. TreasuryDirect.gov's auto-reinvestment feature handles this automatically. Ladders provide better liquidity than a single long purchase while earning more than a savings account.
T-bill interest is exempt from state and local income taxes but subject to federal tax. To calculate your tax-equivalent yield: T-bill yield divided by (1 minus your state tax rate). For a 4.0% T-bill in California at 9.3% state rate: 4.0% divided by 0.907 equals 4.41% tax-equivalent yield. In New York City with combined 14.7% state and city tax: 4.0% divided by 0.853 equals 4.69% tax-equivalent yield. This state tax exemption makes T-bills especially attractive for residents of California, New York, New Jersey, Oregon, and Minnesota.
Yes — T-bills can be sold on the secondary market before maturity through a broker or bank, but not through TreasuryDirect.gov directly. If rates have risen since your purchase, the market price of your bill will be slightly below face value and you may receive less than expected. The T-bill secondary market is extremely liquid with very narrow bid-ask spreads. For bills maturing in 4 to 8 weeks, most investors simply hold to maturity rather than incur any transaction costs. Plan to hold to maturity unless you genuinely need early access to the funds.