Treasury Bill Yield Calculator

T-bills are zero-coupon discount securities. The Treasury never sends you a coupon payment. Instead you buy the bill at auction for less than face value, hold it for 4, 8, 13, 17, 26, or 52 weeks, and the Treasury redeems it at face value on maturity. The difference between purchase price and face value is your interest income. Example: buy a $1,000 13-week bill at $988, hold 91 days, get $1,000 back. The $12 spread is the entire return; there are no periodic payments along the way.

Both are correct, they just answer different questions. The bank discount yield divides the discount by face value and annualizes on a 360-day year. That is the figure the Treasury quotes in auction press releases, but it understates your true return because you only outlay the purchase price, not the face value. The investment yield (also called bond equivalent yield) divides the same discount by what you actually paid and annualizes on a 365-day year. Investment yield is the SEC-mandated number for comparing T-bills to coupon-paying bonds and CDs, and it always comes out higher than the discount yield on the same bill.

Because Treasury bills are direct obligations of the federal government, 31 USC 3124(a) bars states and localities from taxing the interest. That exemption applies in all 50 states and DC, regardless of where you live. The calculator's after-tax yield therefore only deducts your federal marginal rate. In a high-tax state like California, New York, or Oregon, that single-tax treatment can make a T-bill noticeably more attractive than a bank CD paying the same headline rate, since the CD's interest is fully taxed at both federal and state levels.

The Treasury auctions 4-, 8-, 13-, and 26-week bills every Tuesday and Thursday, 17-week bills every Wednesday, and 52-week bills once every four weeks (also on Tuesday). Auction results are published the same day on TreasuryDirect.gov and in the Treasury's auction announcement. Settlement is the following Thursday for the weekly bills. The minimum bid is $100 and bids must be in multiples of $100, so $1,000 buys ten units, $10,000 buys one hundred units, and so on up to the $10 million per-auction noncompetitive cap.

Open a free account at TreasuryDirect.gov, link a checking or savings account, and place noncompetitive bids before the auction deadline (usually around 11 am Eastern). Noncompetitive bids accept whatever yield the auction sets, which is what almost all retail investors should use. There are no purchase commissions, no markups, no account fees, and no minimums beyond the $100 bill increment. You can also schedule automatic reinvestment so the proceeds at maturity roll into a new bill of the same term, which is the simplest way to build a T-bill ladder without manual reordering.