Bank Gap by State
The Bank Gap in Ohio
Ohio has cut its top income-tax rate to 3.99% in recent years, and combined with one of the lower costs of living in the country, the Bank Gap here is mostly a question of finding the best rate rather than optimizing for tax.
Last reviewed August 7, 2026 · SwitchWize Research Desk
Before OH tax
$1,005/yr
on a $25,000 balance
After OH 3.99% tax
$965/yr
recoverable by switching
On a $25,000 balance, the gap is about $1,005 a year before tax. After Ohio's 3.99% top income-tax rate on the additional interest, you keep about $965. Because Treasury interest is exempt from Ohio 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 OH tax |
|---|---|---|---|---|
| $5,000 | $19 | $220 | $201 | $193 |
| $10,000 | $38 | $440 | $402 | $386 |
| $25,000 | $95 | $1,100 | $1,005 | $965 |
| $50,000 | $190 | $2,200 | $2,010 | $1,930 |
| $100,000 | $380 | $4,400 | $4,020 | $3,860 |
Estimates over 12 months at 0.38% current APY and 4.40% better-fit APY. The "After OH tax" column applies OH's 3.99% 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 Ohio changes the math
Ohio's top rate on interest income is 3.99%, down from higher rates in past years under a multi-year cut. Treasury interest is exempt from that tax, giving a modest after-tax edge to T-Bills, though most Ohio savers will find a top HYSA still competitive after tax at this rate.
One of the lowest costs of living in the country keeps typical Ohio emergency-fund balances modest relative to the coasts.
Cost of living in Ohio is among the lowest in the country, which shapes how large an emergency fund needs to be and therefore how many dollars the Bank Gap quietly costs on idle cash.
Because Ohio 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 Ohio tax high-yield savings account interest?
Is a high-yield savings account worth it in Ohio?
Are T-Bills better than a HYSA for Ohio savers?
Your personal Bank Gap
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Enter your balance and current rate. The Rate Gap Calculator shows the gap per year and over five years.
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.