Bank Gap by State

The Bank Gap in Maine

Maine's top tax bracket applies a meaningful rate to savings interest, and coastal cost-of-living pressure means the dollar stakes of the Bank Gap run higher here than in most of northern New England.

Big-bank average0.38%

Best available4.40%

$1,005/yrlost on a $25k balance · 4.02 pp spread

Last reviewed August 7, 2026 · SwitchWize Research Desk

Best savings APY

4.40%

high-yield

National average

0.38%

big-bank avg

APY gap

4.02 pp

spread

ME tax on interest

7.15%

top marginal rate

Before ME tax

$1,005/yr

on a $25,000 balance

After ME 7.15% tax

$933/yr

recoverable by switching

On a $25,000 balance, the gap is about $1,005 a year before tax. After Maine's 7.15% top income-tax rate on the additional interest, you keep about $933. Because Treasury interest is exempt from Maine income tax, routing that cash through a state-tax-exempt Treasury vehicle can recover most of the difference.

Estimated Bank Gap by balance

Estimated annual Bank Gap by balance at 0.38% current APY versus 4.40% better-fit APY, before and after ME state income tax
Balance	Current earnings	Better-fit earnings	Estimated Bank Gap	After ME tax
$5,000	$19	$220	$201	$187
$10,000	$38	$440	$402	$373
$25,000	$95	$1,100	$1,005	$933
$50,000	$190	$2,200	$2,010	$1,866
$100,000	$380	$4,400	$4,020	$3,733

Estimates over 12 months at 0.38% current APY and 4.40% better-fit APY. The "After ME tax" column applies ME's 7.15% 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 Maine changes the math

Maine taxes interest income at a top rate of 7.15%. Treasury interest is generally exempt from that tax, so higher-income Maine savers get a real after-tax lift from T-Bills or a government money market fund relative to a comparably priced taxable account.

Coastal Maine carries meaningfully higher living costs than the state's interior, which pushes emergency-fund sizing — and the dollar cost of the Bank Gap — up for savers in those areas.

Cost of living in Maine is above the national average, particularly along the coast, which shapes how large an emergency fund needs to be and therefore how many dollars the Bank Gap quietly costs on idle cash.

After-tax tip

Because Maine 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 tool

Frequently asked questions

Does Maine tax high-yield savings account interest?

Yes. Maine treats savings interest as taxable income, with a top rate of 7.15%. Interest from U.S. Treasury bills and the Treasury portion of a government money market fund is generally exempt from Maine income tax, which can change the after-tax winner for higher earners.

Is a high-yield savings account worth it in Maine?

Yes. Even after Maine state tax, moving cash from a national-average account to a top high-yield savings account still leaves you with substantially more interest. The Bank Gap is far larger than the state-tax drag on the additional interest.

Are T-Bills better than a HYSA for Maine savers?

They can be for higher earners. Because Treasury interest is exempt from Maine income tax, a T-Bill or government money market fund can deliver a higher after-tax yield than a fully taxable savings account at a similar headline rate. The short-term savings calculator computes the breakeven for your exact tax situation.

Your personal Bank Gap

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Educational 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.