Beyond HYSA & CDs
Savings Alternatives — I-Bonds, TIPS, T-Bills & Money Market Funds
A high-yield savings account is the right default for most people. But depending on your tax situation, time horizon, and inflation outlook, one of these four alternatives may earn you more — or protect more of what you earn.
Quick comparison
Yields as of May 2026. HYSA rate from our live rate database (4.40% best available).
| Product | Yield | Locked? | FDIC | State tax exempt | Annual cap | Best for |
|---|---|---|---|---|---|---|
| HYSA | ~4.4% | No | ✅ | ❌ | None | Liquid emergency fund |
| I-Bond | ~3.1%* | 12 mo+ | ✅** | ✅ | $10K/yr | 5yr+ inflation hedge |
| TIPS (ETF) | ~2%+CPI | No | ❌ | ✅ | None | Tax-deferred inflation hedge |
| T-Bill | ~4.3% | 4–52wk | ❌*** | ✅ | None | High-tax-state cash parking |
| MMF | ~4.9% | No | ❌ | Partial | None | Brokerage idle cash |
| 12-mo CD | ~4.1% | 12 mo | ✅ | ❌ | None | Rate lock before Fed cuts |
* I-Bond composite rate changes every 6 months. ** I-Bonds are backed by the U.S. government, not FDIC. *** T-Bills carry no credit risk but are not FDIC-insured.
Series I Savings Bonds
U.S. Treasury (TreasuryDirect)
Current yield
~3.11% (May 2026 composite)
Rate type
Variable — inflation-adjusted every 6 months
Minimum
$25
Maximum
$10,000/year per person
Liquidity
Locked 12 months. 3-month interest penalty if redeemed before 5 years.
Tax treatment
Federal only (state/local exempt). Deferred until redemption.
Backing
Full faith and credit of the U.S. government
Advantages
- ✓Inflation protection — rate resets every May and November
- ✓Tax-deferred growth until redemption
- ✓State and local tax exempt
- ✓Backed by U.S. government — no credit risk
Drawbacks
- ✗$10K annual purchase cap per Social Security number
- ✗Locked for 12 months — no early redemption at any price
- ✗3-month interest penalty if redeemed before 5 years
- ✗Must buy through TreasuryDirect.gov (clunky interface)
Best for
Inflation hedge on long-term emergency reserves you will not touch for 5+ years
Not for: Emergency funds or money needed in the next 12 months
Treasury Inflation-Protected Securities
U.S. Treasury
Current yield
~2.0–2.3% real yield (5-yr, May 2026)
Rate type
Fixed real rate + inflation adjustment (CPI-linked principal)
Minimum
$100 at TreasuryDirect; any amount via ETF (e.g. SCHP, VTIP)
Maximum
No cap
Liquidity
Tradeable on secondary market or via ETF — high liquidity
Tax treatment
Federal only. Inflation adjustment taxed as ordinary income annually even before redemption ("phantom income").
Backing
Full faith and credit of the U.S. government
Advantages
- ✓Principal adjusts with CPI — real purchasing power protected
- ✓Highly liquid via ETFs
- ✓No credit risk
- ✓No purchase cap
Drawbacks
- ✗Phantom income tax on inflation adjustment in taxable accounts
- ✗Complex mechanics vs. a simple HYSA
- ✗Real yields can be negative in high-demand environments
Best for
Inflation hedge in taxable accounts for money you can hold 5+ years, or in a tax-deferred account to avoid phantom income
Not for: Short-term savings or taxable accounts where phantom income creates a tax drag
Treasury Bills
U.S. Treasury
Current yield
~4.2–4.4% (4-week to 52-week, May 2026)
Rate type
Fixed — set at auction
Minimum
$100 at TreasuryDirect; any amount via ETF (e.g. SGOV, BIL)
Maximum
No cap
Liquidity
ETFs trade intraday; direct T-bills hold to maturity (4 weeks – 52 weeks)
Tax treatment
Federal only (state/local exempt). Paid at maturity.
Backing
Full faith and credit of the U.S. government
Advantages
- ✓Competitive yield — often matches or exceeds top HYSA rates
- ✓State and local tax exempt (meaningful in California, New York, New Jersey)
- ✓No credit risk
- ✓Easy access via T-bill ETFs (SGOV, BIL)
Drawbacks
- ✗Rates reset at each auction — not guaranteed like a CD
- ✗Direct purchase locks you in until maturity
- ✗Slightly less convenient than a bank account
Best for
Short-term cash parking with state tax savings vs. a HYSA, especially in high-tax states like CA, NY, NJ
Not for: Money needed on demand — T-bills require holding to maturity unless you use an ETF
Money Market Mutual Funds
Fidelity, Vanguard, Schwab (brokerage accounts)
Current yield
~4.8–5.0% (government MMF, May 2026)
Rate type
Variable — follows short-term rates, updates daily
Minimum
$1 (Fidelity SPAXX, Vanguard VMFXX)
Maximum
No cap
Liquidity
Same-day redemption to brokerage cash — extremely liquid
Tax treatment
Government MMFs: dividends often state tax-exempt. Prime MMFs: fully taxable.
Backing
Not FDIC-insured. Regulated by SEC. Extremely low risk but not zero (maintained $1 NAV by policy).
Advantages
- ✓Yield often exceeds top HYSA by 0.3–0.7% in normal environments
- ✓Same-day liquidity — better than most HYSA transfer windows
- ✓Government MMFs partially state-tax-exempt
- ✓Stays inside your brokerage — no separate bank account needed
Drawbacks
- ✗Not FDIC-insured (though money market fund "breaks the buck" events are extremely rare)
- ✗Only accessible through a brokerage account
- ✗Rates variable — can drop quickly when Fed cuts
Best for
Idle brokerage cash that you want earning near-top rates with same-day liquidity and no bank account friction
Not for: Replacing your FDIC-insured emergency fund — MMFs are not government-guaranteed
Which one is right for you?
If: You need access within 12 months
→ HYSA or money market fund. Do not lock up emergency reserves.
If: You're in a high-tax state (CA, NY, NJ, MA)
→ T-bills. The state tax exemption can add 0.3–0.7% effective yield vs. a HYSA paying equivalent gross yield.
If: You're worried about inflation over 5+ years
→ I-bonds for the first $10K. TIPS ETF in a tax-deferred account beyond that.
If: You have idle cash inside a brokerage account
→ Government money market fund (SPAXX, VMFXX). Often outyields HYSA with same-day liquidity.
If: You won't need the money for 12 months and want rate certainty
→ CD. A 12-month CD at today's rates locks in yield regardless of what the Fed does next.
If: None of the above
→ High-yield savings account. It is the right default for most liquid cash.
Compare your specific situation
Money Map →
See all your savings, rate, and card leaks in one view
Rate Alerts →
Get notified when HYSA or CD rates change materially
I-Bond vs CD vs HYSA Calculator →
Model returns across all three products for your timeline
Compare CD rates →
Live rates from Marcus, Ally, Synchrony, and 10+ others
Compare HYSA rates →
Best available today — updated daily from 150+ institutions
Rate Gap Calculator →
Calculate exactly what your current bank is costing you
Yields are approximate as of May 2026. Treasury yields sourced from TreasuryDirect and secondary market data. I-bond composite rate from TreasuryDirect.gov. MMF yields from Fidelity and Vanguard fund pages. This is not personalized financial advice. Consult a financial advisor before making decisions involving tax treatment or inflation hedging.