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What does a Treasury bill actually pay?

Opens on today’s published yield curve. Includes the state tax exemption, which is what makes the comparison against savings interesting.

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Term

Bond-equivalent, as Treasury publishes it. Change it to a rate you were actually quoted.

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More options(3)

Leave at zero to work in pre-tax terms.

%

This is what the exemption is worth. Zero if your state has no income tax.

%

Set this to compare. Zero hides the comparison.

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Starts at the 6-month point on the Treasury par yield curve published by U.S. Department of the Treasury on 2026-09-04 (1 day ago). It is a national average, not a quote, and not a rate anyone is offering you — change it to whatever you have actually been quoted.

$10,000 for 26 weeks at 3.98%

$198

Held to maturity, $10,000 returns $10,198.45 after 26 weeks — $198.45 of interest. That is before tax. Add your marginal rates under More options to see what you keep, and what the state exemption is worth.

Interest
$198
At maturity
$10,198
Annualised
3.98%

What this does and does not assume

  • Held to maturity. Interest is paid once, at the end, so nothing compounds during the term. Rolling a bill over repeatedly would compound, and that is a different question.
  • The published curve, not an auction result. Treasury's figures are constant-maturity market yields on a bond-equivalent basis. What you get at auction will differ.
  • Combined marginal rates. The comparison treats federal and state as adding together, which assumes you are not deducting state tax federally — true for anyone taking the standard deduction.
  • Not the bank discount rate. Bills are sometimes quoted at a discount rate, which divides the gain by face value and uses a 360-day year. It always reads lower than what you actually earn. This page uses the bond-equivalent yield throughout.

Where to go next

  • Emergency fund — how much of this you should be able to reach at short notice.
  • Real return — what any of these yields is worth once inflation is taken off.
  • Take-home pay — where your marginal rate comes from, with sourced bands.

The comparison almost everyone gets wrong

Someone sees a savings account paying 4.60% and a Treasury bill yielding 4.37%, and picks the savings account. On those numbers it looks obvious. For a lot of people it is also wrong, and the reason is tax.

Treasury interest is exempt from state and local income tax. Savings interest is not. Both are taxed federally, so that part cancels — but the state part does not, and in a high-tax state it is worth more than the gap between the two headline rates.

That is the whole calculation on this page. Put your state rate in and it works out what a savings account would have to pay to leave you equally well off. When that figure crosses the savings rate you were comparing against, the ranking flips, and the page says so plainly rather than leaving you to notice.

If your state has no income tax, none of this applies and the headline comparison is fine. Leave the state field at zero and the page will stop making the point.

The rate is today's, and it says so

Most bill calculators open on an empty box, which is unhelpful when “what do they actually pay right now” is most of what you wanted to know. This one opens on the current Treasury par yield curve, with the date it was published shown underneath, and a link to the source.

Two caveats worth stating. Those are constant-maturity market yields, not auction results — what you get at auction will differ. And they are on a bond-equivalent basis, not the “bank discount rate” bills are sometimes quoted at, which divides the gain by face value and uses a 360-day year and therefore always reads lower than what you actually earn. Change the rate to whatever you were really quoted and the attribution disappears, because at that point the number is yours rather than Treasury's.

What a bill is not

It is not a savings account. The money is committed until maturity unless you sell, and selling early means taking whatever the market pays that day, which can be less than you put in. A savings account is instant-access and insured. Those differences are real, they matter more than a few basis points for money you might actually need, and no calculator can price them for you.

Common questions

Are Treasury bills really state tax free?
Interest on US Treasury securities is subject to federal income tax and exempt from state and local income tax. That is the general rule and it is why the comparison on this page exists. It applies to the interest — a capital gain from selling a bill before maturity is treated differently, and state rules on how the exemption is claimed vary, so check your own state's guidance or ask someone who files there.
What rate should I put in?
The page starts on the current published curve for the term you pick, which is a reasonable estimate of what is available. If you are buying at auction or through a broker you will have a specific quoted yield — use that instead. The attribution line disappears when you change it, so the page never credits Treasury for a number you typed.
Why does the interest not compound?
A bill pays once, at maturity — you buy it for less than face value and receive face value at the end. There is no intermediate payment to reinvest, so within a single bill there is nothing to compound. Rolling one bill into another repeatedly does compound, but that depends on rates you cannot know yet, so this page does not pretend to model it.
Which marginal rate should I use?
The rate on your next dollar of income, not your average rate — interest sits on top of everything else you earn. The take-home pay calculator shows your federal marginal rate from sourced statutory bands. For the state figure you will need your own state's schedule; this site does not carry fifty states of tax data and will not guess it.
Is this a recommendation to buy Treasury bills?
No. It is arithmetic on figures you supplied plus a published yield. Whether a bill, a savings account, or neither suits you depends on when you need the money, how much access matters, and circumstances no calculator knows. The page deliberately points out what it cannot price.

Not tax or investment advice. Yields shown are constant-maturity figures published by the US Treasury on the date stated, not auction results or offers. Tax rates are figures you supply. State tax treatment varies and individual circumstances differ.

Not advice. This tool applies arithmetic to assumptions you entered. It does not know your circumstances, your tax position or your goals, and it is not a recommendation to buy, sell or hold anything. Past returns do not predict future ones, and no figure here is a forecast.

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