A high-yield savings account and a Treasury bill can show similar headline rates, yet they behave very differently once your money is in them. The bill's yield is fixed until maturity and escapes state income tax. The savings APY can change any day, your state taxes it, and you can withdraw whenever you like. This page sets current bill yields against savings rates, shows how far state tax shifts the result and works through $25,000 held for six months. It is one of our guides to US Treasuries.
What are T-bills paying today?
Treasury publishes bill yields every business day, and the table below pulls the latest figures for each term from that release.
| Term | Discount rate | Investment yield | Price per $1,000 | Yield vs a month ago | Yield vs a year ago |
|---|---|---|---|---|---|
| 4-week | 3.91% | 3.98% | $996.96 | +0.07 pts | 0.00 pts |
| 6-week | 3.91% | 3.98% | $995.44 | -0.04 pts | +0.04 pts |
| 8-week | 4.00% | 4.08% | $993.78 | +0.02 pts | +0.11 pts |
| 13-week | 3.99% | 4.08% | $989.91 | -0.05 pts | +0.23 pts |
| 17-week | 4.07% | 4.18% | $986.55 | -0.05 pts | +0.31 pts |
| 26-week | 4.11% | 4.25% | $979.22 | -0.09 pts | +0.43 pts |
| 52-week | 4.17% | 4.36% | $957.84 | -0.18 pts | +0.66 pts |
Use the investment yield column when you hold a bill up against a savings account. The discount rate is the traditional way bills are quoted, and it always looks lower than what you actually earn because it is figured on face value rather than on the price you pay. The month-ago and year-ago columns show how quickly bill yields have been moving, which matters when we get to the Fed below. Our page on T-bill rates today follows these numbers in more detail, and the worked example further down uses the October 30, 2026 rates so that its arithmetic stays fixed.
Can you compare a bill's yield with a savings APY directly?
Not quite, because a savings APY includes compounding while a bill's investment yield is simple interest scaled up to a year. The gap is small on short bills but worth knowing. A 26-week bill bought at a 4.11% discount on October 30, 2026 had an investment yield of 4.25%. If you could roll it into an identical bill when it matured, that would compound to about 4.30% over a year, and 4.30% is the number to set beside an APY.
The APY vs APR guide covers the compounding side, and our explainer on discount rates vs investment rates covers the bill side. For a first look at how bills are sold at a discount and repaid at face value, start with what a Treasury bill is.
How much does state tax change the answer?
Your state taxes savings interest but not bill interest, so the higher your state rate, the higher the APY a savings account needs to keep up. The comparison is also only close for accounts that pay well above average. The deposit-weighted national rate for savings accounts was 0.38% (FDIC, as of Nov 1, 2026), a small fraction of current bill yields.
Here is what a filer in the 22% federal bracket keeps from each $100 of interest in three kinds of state.
| Where you live, 22% federal bracket | Kept from $100 of savings interest | Kept from $100 of bill interest |
|---|---|---|
| Florida (no personal income tax) | $78.00 | $78.00 |
| Illinois (flat 4.95%) | $73.05 | $78.00 |
| California (9.3% bracket) | $68.70 | $78.00 |
Turn that around and you get the savings APY needed to match the 26-week bill's 4.30% from October 30, 2026: about 4.30% in Florida, 4.59% in Illinois and 4.88% in California. A higher federal bracket raises the bar a little further in taxed states, and our T-bills vs CDs comparison has the full grid by bracket.
On your federal return the two are taxed alike, as interest, with one difference in timing. Savings interest counts in the year the bank credits it, while bill interest counts in the year the bill matures, so a 26-week bill bought in late summer moves its interest into the next tax year. The rules behind the exemption, and how to claim it on a state return, are in are T-bills taxable.
A $25,000 example over six months
The example below holds everything constant except the product, so the gap you see comes from the rate and the tax treatment alone.
Worked example: $25,000 in a 26-week bill or a 4.00% APY savings account
The saver is a single filer with about $90,000 of taxable income, which in 2026 sits in the 22% federal bracket ($50,400 to $105,700) and in California's 9.3% bracket. Rates are from October 30, 2026, and the 4.00% savings APY is an illustration, not an offer, held steady for all 182 days.
- Bill: a 26-week bill at a 4.11% discount. Bills come in $100 steps, so $25,000 buys $25,500 of face value for $24,970.15. At maturity you receive $25,500, so the interest is $529.85. The $29.85 left over earns about 59 cents in savings, which we leave out.
- Savings: $25,000 at 4.00% APY for 182 days earns $493.73.
| State | Bill interest kept after tax | Savings interest kept after tax | Bill's edge |
|---|---|---|---|
| Florida (no income tax) | $413.28 | $385.11 | $28.17 |
| Illinois (flat 4.95%) | $413.28 | $360.67 | $52.61 |
| California (9.3% bracket) | $413.28 | $339.19 | $74.09 |
Even in Florida the bill comes out ahead here, because its 4.30% APY-equivalent beats the 4.00% savings rate before any tax. State tax then widens the gap. In California a savings account would need about 4.88% APY to draw level.
To try other balances or rates, the Treasury bill calculator prices the bill side and the compound interest calculator projects the savings side.
What happens to each rate when the Fed moves?
A bill's yield is locked the day you buy it, while a savings APY can change whenever the bank decides, and banks often adjust after Fed decisions. After its October 28, 2026 meeting the Fed held its target range for the federal funds rate at 3.75% to 4.00%, following a quarter-point increase in September.
On the savings side, Regulation DD normally makes a bank give 30 days' notice before a change that hurts you, but it carves out rate changes on variable-rate accounts, which is how savings accounts are normally set up. A cut can therefore show up on your next statement without warning. Our guide to how high-yield savings accounts work explains how banks set and change these rates.
On the bill side, the bill you own keeps its yield to maturity whatever the Fed does; only its resale price moves. New bills are priced by the market at each auction, so their yields can shift before a Fed meeting if investors expect a move. A bill holder feels a rate change at the next rollover rather than in the middle of the term. The mechanics are in how Fed rate decisions affect T-bill rates, and our recap of the October 2026 Fed decision covers the latest meeting.
Worked example: A quarter-point move two months in
Take the same $25,000 and suppose, as a hypothetical rather than a forecast, that the savings APY changes by a quarter point after 61 days and stays there for the remaining 121 days.
| Savings APY path | Savings interest over 182 days | Change vs a steady 4.00% | 26-week bill interest |
|---|---|---|---|
| Steady at 4.00% | $493.73 | none | $529.85 |
| Cut to 3.75% after 61 days | $473.40 | $20.33 less | $529.85 |
| Raised to 4.25% after 61 days | $514.03 | $20.30 more | $529.85 |
The bill's payout is the same in every row, which is the point of locking in. The flip side is that a bill holder misses a mid-term rise until the bill matures and the cash can be reinvested.
How quickly can you get to your money?
Savings is built for access, while a bill returns cash only at maturity or through a sale at the market price. Federal rules no longer cap savings withdrawals: in April 2020 the Federal Reserve deleted the six-per-month limit on convenient transfers from the Regulation D definition of a savings deposit. The change allows banks to drop their own limits but does not force them to, so some accounts still restrict or charge for frequent withdrawals, and the account agreement says which.
Bills take longer to turn into cash. At maturity, TreasuryDirect pays the face value into your linked bank account, and a brokerage credits it to your cash balance. Selling before maturity is straightforward at a broker on any business day, at the going market price. From TreasuryDirect it takes longer: a bill must be held for 45 calendar days before it can be transferred out to sell, and signing in now requires an ID.me account, the only way to sign in since October 28, 2026. The TreasuryDirect account guide and what happens when a T-bill matures cover the details.
A ladder narrows the access gap. Spreading cash across 4-, 8- and 13-week bills that mature in different weeks means some money comes due regularly, and the T-bill ladder guide shows how to set one up. For how much to keep instantly available, see how much to keep in an emergency fund and where to keep it.
Is a T-bill safer than an FDIC-insured savings account?
Within the insurance limit, both protect principal strongly; they differ in who stands behind them and how much is covered. FDIC insurance covers $250,000 per depositor, per insured bank, per ownership category, so a savings balance under that line is protected even if the bank fails. Interest credited to the account counts toward the same limit, so a balance just under $250,000 can drift above it as the months pass. A Treasury bill is not FDIC-insured at all, as the FDIC itself points out; the full faith and credit of the US government stands behind it instead, with no per-account limit.
The practical difference shows up at large balances and before maturity. Above $250,000 at one bank, part of a savings balance is uninsured unless you spread it across banks or ownership categories, as how to insure more than $250,000 explains. A savings balance does not fluctuate, while a bill's market value can dip below what you paid if you sell early after rates rise. Held to maturity, the bill pays its face value.
What are the downsides of moving savings into T-bills?
You give up instant access and take on small price and reinvestment risks in exchange for a fixed, state-tax-free rate.
- Less flexible cash. Money in a bill is committed until maturity unless you sell, and selling from TreasuryDirect needs a transfer first.
- Price risk before maturity. A bill sold after rates rise fetches less than its steady climb toward face value would suggest, though the shortfall is small on short bills.
- Reinvestment risk. Each maturity is a fresh decision at a new rate. If rates fall, rolled bills pay less, just as a savings APY would.
- Missed increases. If rates rise mid-term, a savings account may follow them while your bill stays at its old yield.
- Inflation. Neither product promises to keep pace with prices. The Bureau of Labor Statistics reported a 3.7% rise in consumer prices over the year to September 2026, higher than the annualized after-tax yield of either option in our example.
- More to manage. Bills need buying, tracking and rolling, while a savings account needs nothing once it is open.
For a fuller list of what can go wrong with Treasuries, see are Treasuries risk-free.
Can you use both?
Yes. One approach keeps a few months of spending in savings for surprises and moves cash you will not touch for a while into bills. The right split depends on how predictable your spending is and how high your state tax rate is: the higher the tax, the more the bill's exemption is worth on each dollar you move. Many savings accounts have no minimum balance, while bills start at $100, in $100 increments.
If you would rather not manage bills yourself, a money market fund or a T-bill ETF holds them for you at a small cost, which we put in dollars in our money market fund comparison and our T-bill ETF comparison.