Bank Gap by State

The Bank Gap in Oregon

Oregon has no general sales tax but makes up for it with one of the highest state income-tax rates in the country, which makes the after-tax treatment of savings interest a bigger factor here than in most states.

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

OR tax on interest

9.90%

top marginal rate

Before OR tax

$1,005/yr

on a $25,000 balance

After OR 9.9% tax

$906/yr

recoverable by switching

On a $25,000 balance, the gap is about $1,005 a year before tax. After Oregon's 9.9% top income-tax rate on the additional interest, you keep about $906. Because Treasury interest is exempt from Oregon 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 OR state income tax
Balance	Current earnings	Better-fit earnings	Estimated Bank Gap	After OR tax
$5,000	$19	$220	$201	$181
$10,000	$38	$440	$402	$362
$25,000	$95	$1,100	$1,005	$906
$50,000	$190	$2,200	$2,010	$1,811
$100,000	$380	$4,400	$4,020	$3,622

Estimates over 12 months at 0.38% current APY and 4.40% better-fit APY. The "After OR tax" column applies OR's 9.9% 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 Oregon changes the math

Oregon taxes interest income at a top rate of 9.9%, among the highest in the nation, a trade-off for having no general state sales tax. Treasury interest is generally exempt from Oregon income tax, so the after-tax case for T-Bills or a government money market fund is strong for higher-income Oregon savers.

Living costs in the Portland metro run well above the rest of Oregon, sizing emergency funds — and the Bank Gap on them — larger for savers in that area than in the state's smaller cities.

Cost of living in Oregon is above the national average, especially in the Portland metro, 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 Oregon 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 Oregon tax high-yield savings account interest?

Yes. Oregon treats savings interest as taxable income, with a top rate of 9.9%. Interest from U.S. Treasury bills and the Treasury portion of a government money market fund is generally exempt from Oregon income tax, which can change the after-tax winner for higher earners.

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

Yes. Even after Oregon 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 Oregon savers?

They can be for higher earners. Because Treasury interest is exempt from Oregon 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.