Bank Gap by State
The Bank Gap in Rhode Island
Rhode Island's top tax rate of 5.99% on savings interest sits in the middle of the national range, against a cost of living that runs above the national average for the country's smallest state.
Last reviewed August 7, 2026 · SwitchWize Research Desk
Before RI tax
$1,005/yr
on a $25,000 balance
After RI 5.99% tax
$945/yr
recoverable by switching
On a $25,000 balance, the gap is about $1,005 a year before tax. After Rhode Island's 5.99% top income-tax rate on the additional interest, you keep about $945. Because Treasury interest is exempt from Rhode Island 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 RI tax |
|---|---|---|---|---|
| $5,000 | $19 | $220 | $201 | $189 |
| $10,000 | $38 | $440 | $402 | $378 |
| $25,000 | $95 | $1,100 | $1,005 | $945 |
| $50,000 | $190 | $2,200 | $2,010 | $1,890 |
| $100,000 | $380 | $4,400 | $4,020 | $3,779 |
Estimates over 12 months at 0.38% current APY and 4.40% better-fit APY. The "After RI tax" column applies RI's 5.99% 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 Rhode Island changes the math
Rhode Island taxes interest income at a top rate of 5.99%. Treasury interest is exempt from that tax, giving higher-income Rhode Island savers a moderate after-tax edge from T-Bills or a government money market fund.
Living costs across Rhode Island run above the national average, close to those of its larger New England neighbors, sizing typical emergency funds accordingly.
Cost of living in Rhode Island is above 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 Rhode Island 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 Rhode Island tax high-yield savings account interest?
Is a high-yield savings account worth it in Rhode Island?
Are T-Bills better than a HYSA for Rhode Island savers?
Your personal Bank Gap
See exactly what the gap is costing you.
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.