Is a HYSA better than a money market fund?

It depends on your tax situation and access needs. A high-yield savings account (HYSA) is FDIC-insured and offers instant access, which makes it better for emergency funds. A government money market fund is not FDIC-insured but may offer a higher after-tax yield in high-tax states because Treasury income is often exempt from state and local tax.

Are government money market funds FDIC insured?

No. Government money market funds are not bank deposits and are not FDIC-insured. They are designed to maintain a stable $1.00 net asset value but that value is not guaranteed. They are generally considered very low risk but are a different type of investment than a bank savings account.

Are T-Bills better than high-yield savings accounts?

T-Bills can be more tax-efficient in high-tax states because Treasury interest is generally exempt from state and local income tax. However, your money is tied to the T-Bill's maturity date. If you need instant access or can't predict when you will need the money, a HYSA is usually more appropriate.

Why do taxes matter when comparing HYSA, money market funds, and T-Bills?

Different savings vehicles are taxed differently. HYSA interest is fully taxable at federal and state levels. Government money market fund income may be partly state-tax exempt depending on the fund's Treasury allocation. T-Bill interest is federally taxable but generally exempt from state and local tax. In high-tax states, these differences can shift which option pays the most after tax.

Can an ultra-short bond fund lose money?

Yes. Unlike a HYSA or money market fund, an ultra-short bond fund has a net asset value (NAV) that can move up or down with interest rates. A 1% rise in rates can reduce the NAV by roughly the fund's duration in years. For money you cannot afford to see temporarily decline, a stable-NAV vehicle is safer.

Where should I keep my emergency fund?

An emergency fund is best kept in an FDIC-insured high-yield savings account. The key requirements are instant access and certainty that the balance will not move down. A HYSA meets both. Money market funds and T-Bills involve trade-offs on access or price stability that make them less suitable for money you need immediately in a crisis.

What is the safest place for short-term savings?

For safety in the traditional sense — no risk of balance loss and FDIC protection — a high-yield savings account at an FDIC-insured bank is the safest option. T-Bills are backed by the U.S. government and extremely safe, but their market price can move if sold before maturity. Government money market funds are also very safe but are not FDIC-insured.

What APY does a HYSA need to beat T-Bills after tax?

The breakeven depends on your state tax rate. Because T-Bill income is generally exempt from state and local tax, a fully taxable HYSA needs a higher gross APY to match the same after-tax return. The calculator above computes this breakeven for your exact tax profile.

Should I use T-Bills for money I need soon?

Only if your timing is flexible. T-Bills have fixed maturity dates (4, 8, 13, 17, 26, or 52 weeks). If you need the money before the T-Bill matures, you can sell it in the secondary market but the price may be slightly above or below what you paid. For money needed within days, a HYSA or government money market fund is more appropriate.

What is the difference between APY and after-tax yield?

APY (annual percentage yield) is the gross stated return before taxes. After-tax yield is what you actually keep after paying federal, state/local, and any extra taxes on the interest income. The after-tax yield is the number that matters for comparing savings vehicles because taxes treat each type of interest differently.

Savings · Gov MMFMoney Market Fund — a mutual fund holding short-term, liquid securities such as Treasuries and agency debt. Not a bank deposit; not FDIC-insured. Designed for stable value but not guaranteed. · Ultra-short · T-BillsTreasury Bills — short-term U.S. government debt maturing in 4, 8, 13, 17, 26, or 52 weeks. Backed by the U.S. Treasury. Interest is federally taxable but generally exempt from state and local income tax.

Short-Term Savings Decision Tool

Where should I put my short-term savings?

Where should your cash live?Don't just chase the highest APYAnnual Percentage Yield — the total interest earned in one year including compounding, stated as a percentage. The gross return before taxes..

Compare high-yield savings, government money market funds, T-BillsTreasury Bills — short-term U.S. government debt maturing in 4, 8, 13, 17, 26, or 52 weeks. Backed by the U.S. Treasury. Interest is federally taxable but generally exempt from state and local income tax., and ultra-short bond funds by after-tax yieldThe return you actually keep after paying federal income tax, state/local income tax, and any applicable surtax on interest earned. The number that matters for comparing options., access, safety, timing, and risk.

Live rates · updated dailyNo login requiredTax-aware

The four short-term cash options

High-yield savings

A bank savings account paying above-average interest, with full FDIC coverage and instant access.

FDIC-insured up to $250k

Instant access

No movement NAVNet Asset Value — the per-share price of a fund. A stable-NAV fund aims to keep this at exactly $1.00. If NAV drops below $1.00 ("breaking the buck"), investors lose principal.

Fully taxable

Best for

Emergency funds and certainty-first money

Gov money market fund

A mutual fund holding short-term Treasuries. Liquid at a brokerage. Not a bank deposit.

Treasury income — state-tax angle

Same/next-day at broker

Not FDIC-insured

Aims for stable $1.00 NAVNet Asset Value — the per-share price of a fund. A stable-NAV fund aims to keep this at exactly $1.00. If NAV drops below $1.00 ("breaking the buck"), investors lose principal.

Best for

Brokerage cash; high-tax states

T-Bills

Short-term U.S. government debt maturing in 4–52 weeks. State/local tax exempt.

U.S. Treasury-backed

State/local tax exempt

Fixed maturity date

Sell-before-maturity risk

Best for

Known-date cash in high-tax states

Ultra-short bonds

A bond fund with very short duration (under 1 year). Higher yield potential, some price risk.

Higher yield potential

1–3 year fit

can dip NAVNet Asset Value — the per-share price of a fund. A stable-NAV fund aims to keep this at exactly $1.00. If NAV drops below $1.00 ("breaking the buck"), investors lose principal.

Not FDIC-insured

Best for

1–3 year conservative income

Tell us about your cash

Three steps — we'll find the best fit.

Live · Jun 15

Step 1 · What is this money for?

Step 2 · Amount & tax profile

Savings amount

State

State/local tax rate

Federal income tax bracket

Step 3 · Guardrails

Toggle to reflect your situation. Affects scoring.

Instant result · no login required

Best fit · not just yield

High-yield savings

FDIC eligibility, certainty, and fast access beat chasing a slightly higher yield for this job.

100Fit scoreout of 100

After-tax yield: 3.21%
Annual income: $803
Highest APY?: No

✓

FDIC is a hard filterBank deposits win when you require federal deposit insurance.

✓

No-dip guardrail appliedBond funds are penalized because the balance cannot temporarily decline.

↔

Tax math: low advantageWith low state taxes, the Treasury tax advantage matters less and product fit matters more.

Access noteVerify transfer speed and withdrawal limits before using any account as your only emergency fund.

!Before using any account as your only emergency fund, verify transfer speed, withdrawal limits, and whether money can reach your checking account quickly.

View PiBank High Yield Savings offer →

Rate assumptions

High-yield savings 4.40%PiBank High Yield Savings · top observed APY · Jun 15, 2026

Gov MMF 4.20%7-day SEC yield assumption · Jun 15, 2026

T-Bills 4.35%Treasury yield assumption · Jun 15, 2026

Ultra-short 4.75%Category SEC yield estimate · Jun 15, 2026

Highest APYAnnual Percentage Yield — the total interest earned in one year including compounding, stated as a percentage. The gross return before taxes. is not the same as best fit.

Ultra-short bonds has the highest headline APY (4.75%), but High-yield savings matches your safety, access, and timing needs better.

All four options, ranked

Ranked by fit score for your scenario

Best fit

High-yield savings

Best when the money must be certain and available quickly.

100/100

After tax3.21%

Annual$803

AccessInstant

Dip riskNone

Fully taxable — state taxes reduce the advantage in high-tax states.

Gov money market

Useful for liquid brokerage cash, especially in high-tax states.

63/100

After tax3.17%

Annual$792

AccessSame/next day

Dip riskStable aim

Not a bank deposit. Not FDIC-insured. Government MMFs aim for a stable $1.00 NAV but it is not guaranteed — they are securities and can lose value.

T-Bills

State-tax efficient for known-date cash, but timing matters.

24/100

After tax3.31%

Annual$827

AccessAt maturity

Dip riskIf sold early

Best held to maturity. You can sell before maturity, but selling from TreasuryDirect requires transferring to a bank, broker, or dealer first.

Ultra-short bonds

Can yield more than cash, but NAV can move — not a cash substitute.

0/100

After tax3.47%

Annual$867

AccessT+1 at broker

Dip riskCan dip

Not cash. NAV can decline — never use for emergency funds.

Why High-yield savings won

Score: 100/100 · Highest after-tax yield: Ultra-short bonds (3.47%)

Yield position

After-tax yield vs alternatives+4

Purpose match

Fit to what this money is for+35

Timeline fit

Fit to your time horizon+18

Access need

Liquidity for your access need+20

FDIC / backing

Deposit insurance or government backing+45

Stability

Protection against balance decline+22

When taxes flip the answer

Treasury income avoids state/local tax — in high-tax states, T-BillsTreasury Bills — short-term U.S. government debt maturing in 4, 8, 13, 17, 26, or 52 weeks. Backed by the U.S. Treasury. Interest is federally taxable but generally exempt from state and local income tax. and gov money market can win after tax.

Gov MMF breakeven savings APY4.34%

A fully taxable savings rate needs 4.34% to match 3.17% after tax. Current top rate (4.40%) is above breakeven.

T-Bill breakeven savings APY4.53%

A fully taxable savings rate needs 4.53% to match 3.31% after tax. Current top rate (4.40%) is below breakeven — tax edge applies.

Timeline fit

Where each vehicle naturally belongs by time horizon. Your current horizon is highlighted.

0–3 moyour horizon

Savings

Emergency cash — stability and access first.

3–12 mo

SavingsGov MMFT-Bills

Known expenses; tax efficiency starts to matter.

1–3 yr

T-BillsUltra-short

More yield options if timing is flexible.

3+ yr

Ultra-short

Cash becomes expensive — consider investing.

When each option wins

Real conditions where each vehicle is the right answer.

High-yield savings wins when

Emergency fund needing instant access
FDIC coverage is required or strongly preferred
Balance must not move down under any circumstances
Simple setup with no brokerage account needed

Fully taxable — high-tax states reduce the advantage.

Gov money market wins when

You already have a Fidelity, Schwab, or Vanguard account
High-tax state where Treasury income avoids state tax
Cash-like liquidity without needing a bank deposit
FDIC is not required

Not FDIC-insured. Stable-value objective, not guaranteed.

T-Bills wins when

Known cash date that matches a T-Bill maturity
High-tax state valuing state-tax exemption
Want U.S. Treasury backing without a fund structure
Access timing is flexible

Best held to maturity. You can sell before maturity, but selling from TreasuryDirect requires transferring to a bank, broker, or dealer first.

Ultra-short bonds wins when

1–3 year horizon with some tolerance for NAV movement
Higher income is the priority over capital certainty
Conservative income sleeve inside a broader portfolio
Can tolerate a small, temporary balance decline

Not cash. NAV can decline — never use for emergency funds.

Decision table

Side-by-side feature comparison.

Scroll right to see all columns →

Feature	High-yield savings	Gov money market	Ultra-short bonds	T-Bills
What it is	Bank savings account	Cash-like mutual fund	Short-duration bond fund	U.S. Treasury security
FDIC / backing	FDIC eligible	Not FDIC insured	Not FDIC insured	U.S. government backed
State tax angle	Fully taxable	Treasury share may avoid state	Mostly taxable	Generally state-tax exempt
Liquidity	Instant / fast	Same/next-day at broker	Sell shares, T+1	Best held to maturity
Can value dip?	No	Designed for stable value	Yes, NAV can move	If sold before maturity
After-tax yield	3.21%	3.17%	3.47%	3.31%
Best use	Emergency cash	Brokerage cash / high-tax	1–3 year flexible bucket	Known-date cash + tax edge

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Frequently asked questions

: It depends on your tax situation and access needs. A high-yield savings account (HYSA) is FDIC-insured and offers instant access, which makes it better for emergency funds. A government money market fund is not FDIC-insured but may offer a higher after-tax yield in high-tax states because Treasury income is often exempt from state and local tax.
: No. Government money market funds are not bank deposits and are not FDIC-insured. They are designed to maintain a stable $1.00 net asset value but that value is not guaranteed. They are generally considered very low risk but are a different type of investment than a bank savings account.
: T-Bills can be more tax-efficient in high-tax states because Treasury interest is generally exempt from state and local income tax. However, your money is tied to the T-Bill's maturity date. If you need instant access or can't predict when you will need the money, a HYSA is usually more appropriate.
: Different savings vehicles are taxed differently. HYSA interest is fully taxable at federal and state levels. Government money market fund income may be partly state-tax exempt depending on the fund's Treasury allocation. T-Bill interest is federally taxable but generally exempt from state and local tax. In high-tax states, these differences can shift which option pays the most after tax.
: Yes. Unlike a HYSA or money market fund, an ultra-short bond fund has a net asset value (NAV) that can move up or down with interest rates. A 1% rise in rates can reduce the NAV by roughly the fund's duration in years. For money you cannot afford to see temporarily decline, a stable-NAV vehicle is safer.
: An emergency fund is best kept in an FDIC-insured high-yield savings account. The key requirements are instant access and certainty that the balance will not move down. A HYSA meets both. Money market funds and T-Bills involve trade-offs on access or price stability that make them less suitable for money you need immediately in a crisis.
: For safety in the traditional sense — no risk of balance loss and FDIC protection — a high-yield savings account at an FDIC-insured bank is the safest option. T-Bills are backed by the U.S. government and extremely safe, but their market price can move if sold before maturity. Government money market funds are also very safe but are not FDIC-insured.
: The breakeven depends on your state tax rate. Because T-Bill income is generally exempt from state and local tax, a fully taxable HYSA needs a higher gross APY to match the same after-tax return. The calculator above computes this breakeven for your exact tax profile.
: Only if your timing is flexible. T-Bills have fixed maturity dates (4, 8, 13, 17, 26, or 52 weeks). If you need the money before the T-Bill matures, you can sell it in the secondary market but the price may be slightly above or below what you paid. For money needed within days, a HYSA or government money market fund is more appropriate.
: APY (annual percentage yield) is the gross stated return before taxes. After-tax yield is what you actually keep after paying federal, state/local, and any extra taxes on the interest income. The after-tax yield is the number that matters for comparing savings vehicles because taxes treat each type of interest differently.

Educational only — not financial advice. Bank deposits may be FDIC-insured when held at an FDIC-insured institution within applicable limits. Money market funds are not bank deposits and are not FDIC-insured. Ultra-short bond funds can lose value. T-Bills are backed by the U.S. Treasury if held to maturity; selling before maturity can involve price movement. Tax estimates are simplified and may not reflect your full situation. Rates change and should be verified before acting.