T-Bill Calculator
What a Treasury bill costs, what it pays at maturity, and the real yield to compare against a savings account.
Treasury bills are sold at a discount and pay face value at maturity; there are no coupons. The quoted discount rate of 4.50% understates the true return because it uses a 360-day year and divides by face value rather than the price actually paid. The investment yield of 4.669% is the number to compare against a savings account or CD. Interest is exempt from state and local tax.
Treasury bills pay no coupon. You buy at a discount and receive full face value at maturity, and the difference is the interest. The rate quoted at auction is a bank discount rate computed on a 360-day year against face value, which understates what you actually earn.
Frequently asked questions
How do I buy Treasury bills?
Directly from the government through TreasuryDirect with a $100 minimum, or through most brokerages, which often offer both new auctions and the secondary market. Money market funds holding bills are the hands-off alternative.
What terms are available?
Bills are issued in 4, 8, 13, 17, 26, and 52 week terms. Longer terms usually pay more, though the curve inverts when markets expect rate cuts, at which point short bills can pay the most.
Are T-bills risk free?
They carry effectively no default risk, being backed by the US government, and their short maturity means little interest rate risk. The real risk is inflation: a bill yielding below the inflation rate loses purchasing power with certainty.
How are T-bills taxed?
Interest is subject to federal income tax in the year the bill matures, and exempt from state and local income tax. That exemption makes the after-tax yield noticeably better than an equivalent bank CD in states with high income taxes.
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Calculators model hypothetical outcomes from the inputs you provide. They are informational only, not financial, investment, tax, or legal advice.