Bank Gap by State
The Bank Gap in Utah
Utah applies a flat 4.65% income tax to savings interest, a moderate rate against a cost of living that's rising fastest along the fast-growing Salt Lake City to Provo corridor.
Last reviewed August 7, 2026 · SwitchWize Research Desk
Before UT tax
$1,005/yr
on a $25,000 balance
After UT 4.65% tax
$958/yr
recoverable by switching
On a $25,000 balance, the gap is about $1,005 a year before tax. After Utah's 4.65% top income-tax rate on the additional interest, you keep about $958. Because Treasury interest is exempt from Utah 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 UT tax |
|---|---|---|---|---|
| $5,000 | $19 | $220 | $201 | $192 |
| $10,000 | $38 | $440 | $402 | $383 |
| $25,000 | $95 | $1,100 | $1,005 | $958 |
| $50,000 | $190 | $2,200 | $2,010 | $1,917 |
| $100,000 | $380 | $4,400 | $4,020 | $3,833 |
Estimates over 12 months at 0.38% current APY and 4.40% better-fit APY. The "After UT tax" column applies UT's 4.65% 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 Utah changes the math
Utah taxes interest income at a flat 4.65% rate. Treasury interest is exempt from that tax, giving a modest after-tax edge to T-Bills, though most Utah savers will find a top HYSA still competitive after tax at this rate.
Housing costs along the Wasatch Front have climbed quickly in recent years, gradually raising typical emergency-fund targets for savers in that corridor relative to more rural parts of the state.
Cost of living in Utah is near the national average, rising in the Salt Lake City corridor, which shapes how large an emergency fund needs to be and therefore how many dollars the Bank Gap quietly costs on idle cash.
Because Utah 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 Utah tax high-yield savings account interest?
Is a high-yield savings account worth it in Utah?
Are T-Bills better than a HYSA for Utah 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.