💰 Treasury Bills vs HYSA Calculator
Compare T-Bills and High-Yield Savings Accounts with live rates and tax-equivalent yields
📊 Investment Comparison
🏛️ Treasury Bill Settings
💳 High-Yield Savings Account
📋 Tax Information
📄 Auto-Fill from Statement (Optional)
Drop your bank or brokerage statement here
Supports PDF and CSV files • We'll auto-extract your account balance
Treasury Bills
Tax-Equivalent Yield (What HYSA would need to match T-Bills after taxes)
📈 Growth Trajectory Comparison
📚 Understanding the Comparison
What are Treasury Bills?
Treasury Bills (T-Bills) are short-term debt securities issued by the U.S. Department of the Treasury. They're considered one of the safest investments because they're backed by the full faith and credit of the U.S. government.
- Sold at a discount, mature at face value
- Terms: 4-week, 13-week, 26-week, and 52-week
- Minimum investment: $100
- Can be purchased directly from TreasuryDirect.gov
- Exempt from state and local income taxes
What are HYSAs?
High-Yield Savings Accounts are FDIC-insured savings accounts offered by online banks that pay significantly higher interest rates than traditional savings accounts.
- FDIC insured up to $250,000 per depositor
- Interest compounds daily or monthly
- Instant liquidity - withdraw anytime
- No minimum investment (usually)
- Interest taxed as ordinary income (federal + state)
🎯 Tax-Equivalent Yield (TEY)
This calculator shows the TEY - the interest rate a HYSA would need to offer to match T-Bill returns after accounting for state tax exemption. If your HYSA rate is below the TEY, T-Bills offer better after-tax returns.
Pros & Cons
✅ T-Bills Advantages
- State tax exempt
- U.S. government backed
- Predictable returns
- Higher yields currently
❌ T-Bills Disadvantages
- Locked until maturity
- $100 minimum
- Purchase process
- Early sale may lose value
✅ HYSA Advantages
- Instant liquidity
- FDIC insured
- No lock-up period
- Easy to use
❌ HYSA Disadvantages
- Fully taxable (Fed+State)
- Variable rates
- Banks can cut rates
- Monthly withdrawal limits
When to Choose T-Bills
- You live in a high-tax state (CA, NY, NJ, etc.)
- You don't need immediate access to funds
- Your investment horizon matches T-Bill terms
- You want guaranteed, predictable returns
- T-Bill TEY exceeds your HYSA rate
When to Choose HYSA
- You need emergency fund liquidity
- You're in a no-tax state (TX, FL, WA, etc.)
- You want to avoid investment hassle
- Your HYSA rate exceeds T-Bill TEY
- You make frequent deposits/withdrawals
🔥 Pro Tip: Ladder Strategy
Many investors use both! Keep 3-6 months of expenses in a HYSA for emergencies, then build a T-Bill ladder with excess savings. As each T-Bill matures, reinvest into new T-Bills to maintain liquidity while maximizing returns.
How We Calculate
HYSA Future Value: We use the compound interest formula FV = P × (1 + r/n)^(n×t) where r is your annual interest rate, n is compounding frequency, and t is time in years.
Note on Rates: Banks typically advertise "APY" (Annual Percentage Yield). For most practical comparisons, you can enter your bank's advertised rate directly. Our calculator applies the compounding based on your selected frequency (daily, monthly, or quarterly) to compute the effective return.
T-Bill Return: Simple interest calculation based on the discount yield and term length: Interest = P × r × (days/365.25).
Tax-Equivalent Yield: TEY = T-Bill Yield × (1 - Federal Rate) ÷ (1 - Federal Rate - State Rate). This shows what HYSA rate you'd need to match T-Bill after-tax returns.
Live Rates: T-Bill rates are fetched in real-time from the U.S. Treasury Department via FRED API.
What Is a Treasury Bills vs HYSA Calculator?
A Treasury Bills vs HYSA Calculator helps you compare after-tax returns between U.S. Treasury Bills and high-yield savings accounts. Investors commonly use this tool to determine which option delivers better earnings after accounting for federal and state taxes. Treasury Bills offer a unique advantage because they are exempt from state and local income taxes.
By entering your investment amount, current T-Bill yield, HYSA rate, and tax brackets, this calculator shows your net interest from each option and reveals the tax-equivalent yield. The tax-equivalent yield tells you what APY a savings account would need to match a T-Bill’s after-tax return.
This calculator is especially useful when parking cash for three to twelve months, comparing safe investment options, or maximizing after-tax returns in high-tax states where the state tax exemption provides significant savings.
How This Calculator Works
The calculator applies simple interest to both options over the T-Bill maturity period. For Treasury Bills, it calculates interest earned, subtracts only federal taxes, and shows your net return. For savings accounts, it calculates interest earned, then subtracts both federal and state taxes to show your net return.
The final result shows which option delivers better after-tax returns and calculates how much you save in state taxes by choosing T-Bills. The calculation method follows standard interest formulas and current tax treatment used by the IRS and financial institutions.
This calculator provides instant results comparing net interest, total taxes paid, and the exact APY a savings account would need to beat the T-Bill after all taxes are considered.
Formula: Interest = P × r × (t/365), Tax = Interest × rate
Where P = principal, r = annual yield, t = days to maturity, rate = tax bracket
Why Tax-Equivalent Yield Matters
Your tax-equivalent yield reveals the true comparison between state-taxable and state-exempt investments. In high-tax states like California or New York with rates above 9%, Treasury Bills can deliver significantly better after-tax returns even when their nominal yield appears lower than savings account rates.
A higher tax-equivalent yield means a savings account must pay substantially more to match T-Bill returns. A lower tax-equivalent yield indicates the savings account already beats the T-Bill even after accounting for the state tax advantage.
What Is Considered a Good Tax-Equivalent Yield?
- 5.5% to 6.5% TEY: Excellent equivalent yield showing strong T-Bill advantage in high-tax states
- 4.5% to 5.4% TEY: Good equivalent yield making T-Bills competitive with top HYSA rates
- 3.5% to 4.4% TEY: Fair equivalent yield where HYSA may offer better returns
- Below 3.5% TEY: Poor equivalent yield where HYSA clearly wins on after-tax basis
How to Maximize Your After-Tax Returns
- Choose T-Bills in high-tax states: The state tax exemption provides the biggest advantage when your state rate exceeds 7% to 9%.
- Ladder T-Bill maturities: Buy T-Bills with different maturity dates to maintain liquidity while capturing current yields.
- Compare current yields weekly: T-Bill rates change at auction while HYSA rates adjust based on Federal Reserve policy, so recalculate when rates shift.
- Consider term length carefully: Shorter T-Bills offer more flexibility but may have lower yields than six-month or one-year terms.
Frequently Asked Questions
What is the main advantage of Treasury Bills over savings accounts?
Treasury Bills are exempt from state and local income taxes, which can save 5% to 13% depending on your state. They are also backed by the full faith of the U.S. government with zero default risk.
Can I access my money early with Treasury Bills?
Yes, you can sell T-Bills on the secondary market before maturity, but you may receive more or less than your purchase price depending on current interest rates. HYSA funds remain fully liquid.
Is this calculator accurate?
This calculator provides estimates based on the information you enter and should be used as a planning tool, not as a substitute for professional financial advice.