What is a T-bill tax-equivalent yield?

It is the taxable APY a bank account would need to match a Treasury bill after federal and state tax assumptions. Treasury interest is generally exempt from state and local income tax, but it is still federally taxable.

Do T-bills always beat high-yield savings after tax?

No. A high-yield savings account can still win when its APY is high enough, when the saver has low state income tax exposure, or when liquidity and simplicity matter more than the tax benefit.

No. This calculator is educational. Federal, state, local, and account-specific tax rules can vary, so confirm your own situation with a qualified tax professional.

After-tax cash yield

T-Bill Tax-Equivalent Yield Calculator

Compare a Treasury bill with a high-yield savings account after federal and state tax assumptions. For this scenario, HYSA leads by about $79 per year on $50,000.

Quick answer: T-bills can beat a high-yield savings account after tax when the Treasury state-tax exemption outweighs any APY gap. Compare after-tax yield, annual dollars, liquidity timing, and FDIC needs before moving short-term cash.

HYSA after tax

2.94%

4.20% APY before tax

T-bill after tax

2.78%

Assumes state-tax exemption

Taxable equivalent

3.97%

APY a taxable account would need

Result

HYSA wins this modeled scenario.

HYSA after-tax interest is about $1,470 per year. T-bill after-tax interest is about $1,391 per year.

Why it matters

Pre-tax APY can mislead.

Treasury interest is generally exempt from state and local income tax. That can make a lower quoted T-bill yield compete with a higher taxable savings APY.

Next step

Compare the broader cash choice.

Taxes are one factor. Liquidity, FDIC insurance, purchase mechanics, and rate changes still matter.

Open HYSA vs T-bills guide