Bank Gap by State
The Bank Gap in Missouri
Missouri has been cutting its top income-tax rate in steps for several years running, and the current 4.8% top rate applies to savings interest against a cost of living below the national average.
Last reviewed August 7, 2026 · SwitchWize Research Desk
Before MO tax
$1,005/yr
on a $25,000 balance
After MO 4.8% tax
$957/yr
recoverable by switching
On a $25,000 balance, the gap is about $1,005 a year before tax. After Missouri's 4.8% top income-tax rate on the additional interest, you keep about $957. Because Treasury interest is exempt from Missouri 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 MO tax |
|---|---|---|---|---|
| $5,000 | $19 | $220 | $201 | $191 |
| $10,000 | $38 | $440 | $402 | $383 |
| $25,000 | $95 | $1,100 | $1,005 | $957 |
| $50,000 | $190 | $2,200 | $2,010 | $1,914 |
| $100,000 | $380 | $4,400 | $4,020 | $3,827 |
Estimates over 12 months at 0.38% current APY and 4.40% better-fit APY. The "After MO tax" column applies MO's 4.8% 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 Missouri changes the math
Missouri's top rate on interest income currently sits at 4.8%, with further reductions written into state law contingent on revenue triggers. Treasury interest is exempt from that tax, giving a modest after-tax edge to T-Bills that will grow slightly as the state rate continues to fall.
A below-average cost of living keeps typical Missouri emergency-fund balances modest outside the St. Louis and Kansas City metros.
Cost of living in Missouri is below 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 Missouri 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 Missouri tax high-yield savings account interest?
Is a high-yield savings account worth it in Missouri?
Are T-Bills better than a HYSA for Missouri 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.