Bank Gap by State
The Bank Gap in Delaware
Delaware's top tax bracket applies to savings interest like any other income, at a rate high enough that the Treasury exemption is worth checking for higher-income savers, even though the state's overall cost of living sits close to the national norm.
Last reviewed August 7, 2026 · SwitchWize Research Desk
Before DE tax
$1,005/yr
on a $25,000 balance
After DE 6.6% tax
$939/yr
recoverable by switching
On a $25,000 balance, the gap is about $1,005 a year before tax. After Delaware's 6.6% top income-tax rate on the additional interest, you keep about $939. Because Treasury interest is exempt from Delaware income tax, routing that cash through a state-tax-exempt Treasury vehicle can recover most of the difference.
Estimated Bank Gap by balance
| Balance | Current earnings | Better-fit earnings | Estimated Bank Gap | After DE tax |
|---|---|---|---|---|
| $5,000 | $19 | $220 | $201 | $188 |
| $10,000 | $38 | $440 | $402 | $375 |
| $25,000 | $95 | $1,100 | $1,005 | $939 |
| $50,000 | $190 | $2,200 | $2,010 | $1,877 |
| $100,000 | $380 | $4,400 | $4,020 | $3,755 |
Estimates over 12 months at 0.38% current APY and 4.40% better-fit APY. The "After DE tax" column applies DE's 6.6% top income-tax rate to the additional interest; federal tax applies on top and is not shown. Example only — your result depends on your balance, rates, and time horizon.
Why Delaware changes the math
Delaware taxes interest income at a top graduated rate of 6.6%. Because Treasury interest is generally exempt from Delaware income tax, higher earners can pick up a real after-tax edge from T-Bills or a government money market fund over a comparably priced taxable HYSA.
With living costs close to the national average, a standard three-to-six-month emergency fund is a reasonable benchmark, and the Bank Gap applies in full to whatever that balance is before the state-tax adjustment on the additional interest.
Cost of living in Delaware is near the national average, which shapes how large an emergency fund needs to be and therefore how many dollars the Bank Gap quietly costs on idle cash.
Because Delaware taxes savings interest but not Treasury interest, the highest after-tax yield is not always the highest headline APY. Run your tax profile through the short-term savings tool to see whether a Treasury bill or government money market fund beats a taxable account for you.
Open the short-term savings toolFrequently asked questions
Does Delaware tax high-yield savings account interest?
Is a high-yield savings account worth it in Delaware?
Are T-Bills better than a HYSA for Delaware savers?
Your personal Bank Gap
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Calculate my Bank GapEducational information, not tax or financial advice. State tax rules are summarized at a high level and depend on your full situation. Rates are illustrative of current market conditions and should be confirmed with the provider. Confirm tax treatment with a qualified professional.