{"post":{"slug":"treasury-bills-vs-savings-2026","title":"Treasury bills vs savings accounts in 2026: which earns more after tax?","excerpt":"T-bills and HYSAs are neck-and-neck on headline yield in 2026, but the state-tax exemption on T-bills can shift the winner depending on where you live.","category":"finance","date":"April 26, 2026","author":"ByteLedger Team","content":"<span class=\"dropcap\">T</span>reasury bills and high-yield savings accounts are the two most common homes for risk-free cash in 2026. Headline rates are often close enough that choosing between them feels like a coin flip — but once you factor in state income taxes and liquidity, one option usually wins clearly for your specific situation. Here is how to run the comparison correctly.\n\n## What changed in 2026\n\n- **TreasuryDirect improved its interface** in late 2025, making direct T-bill purchases more accessible for non-institutional buyers.\n- **Brokerage T-bill access normalized.** Fidelity, Schwab, and Vanguard now make T-bill purchases nearly as seamless as buying a stock — often settling the same day.\n- **HYSA rates softened slightly.** Several online banks trimmed rates 10–30 basis points in early 2026; T-bills stayed competitive because they track auction demand directly.\n- **State-tax awareness grew.** More savers discovered the state-tax exemption in 2025 and are now deliberately comparing after-tax yields.\n\n## The core comparison\n\n| Feature | T-bills | HYSA |\n|---|---|---|\n| Typical yield (mid-2026) | 4.6–5.0% | 4.5–5.2% |\n| Federal income tax | Yes (ordinary income) | Yes (ordinary income) |\n| State/local income tax | Exempt | Taxable |\n| Liquidity | At maturity (4–52 weeks) | Same-day to 3 business days |\n| FDIC/government backing | U.S. government | FDIC up to $250k |\n| Minimum purchase | $100 (TreasuryDirect) | Varies ($0–$500) |\n| Complexity | Slightly higher | Very simple |\n\n## The after-tax math\n\nThe state-tax exemption is the decisive variable. Here is a simplified comparison:\n\nIf you live in a state with a 6% income tax rate and your T-bill yields 4.8% while the best HYSA yields 5.0%:\n\n- **HYSA after-tax yield**: 5.0% × (1 − 0.06 state) = ~4.70% (simplified, ignoring federal for comparison purposes)\n- **T-bill after-tax yield**: 4.8% (no state tax) = 4.8%\n\nIn this scenario, the T-bill wins despite having a lower headline rate. Run this comparison with your state's actual marginal rate for accuracy.\n\nStates with no income tax (Florida, Texas, Washington, Nevada, and others) receive no benefit from the T-bill exemption — the HYSA typically wins there on headline yield.\n\n## How to pick\n\n1. **Identify your state's income tax rate on ordinary income.** Use your marginal state rate for the calculation.\n2. **Compare after-tax yields** using the simplified formula above.\n3. **Assess your liquidity need.** If there is any chance you need the money before the T-bill matures, keep that portion in a HYSA.\n4. **Choose your purchase method.** TreasuryDirect.gov for direct purchases; your brokerage for a more integrated experience.\n5. **Consider a split.** Emergency fund (1–2 months) in HYSA; savings buffer (3–12 months) in a T-bill ladder across 4, 8, and 13-week bills.\n\n## T-bill ladder basics\n\nA simple ladder rolls maturities to maintain ongoing liquidity:\n\n| Bill | Term | Amount |\n|---|---|---|\n| Bill 1 | 4 weeks | $5,000 |\n| Bill 2 | 8 weeks | $5,000 |\n| Bill 3 | 13 weeks | $5,000 |\n\nWhen Bill 1 matures in 4 weeks, reinvest in a new 13-week bill. Now you have a T-bill maturing every 4 weeks, providing steady liquidity while earning near full short-term yield.\n\n## Common mistakes\n\n**Forgetting the T-bill is locked.** You cannot sell a TreasuryDirect T-bill before maturity. If you might need the cash, either use a HYSA or buy through a brokerage where T-bills trade in a secondary market.\n\n**Comparing pre-tax yields only.** The 0.2% headline difference can flip entirely after state taxes in a high-tax state.\n\n**Using TreasuryDirect for active management.** The site works but is clunky for frequent transactions. Brokerage T-bill purchases offer better tooling for laddering.\n\n**Skipping the math on small balances.** On a $3,000 balance, the after-tax difference between the two options is often under $20/year — not worth significant complexity.\n\n**Assuming T-bills are always better.** In no-income-tax states, a HYSA with a competitive rate is often the simpler and equally rewarding choice.\n\n## What to skip\n\n- **Long-term T-notes and T-bonds** if your goal is short-term cash parking — the yield curve may not reward you for the additional duration risk.\n- **I-bonds** for this comparison — they have a 12-month lock-up and annual purchase limits that make them unsuitable as a HYSA substitute.\n- **Indirect T-bill exposure through bond ETFs** if you need a predictable maturity date — ETF prices fluctuate even when underlying T-bills do not.\n\n## FAQ\n\n**How do I actually buy a T-bill?**\nThrough TreasuryDirect.gov (direct purchase, no fee, no secondary market), or through your brokerage under \"Fixed Income\" or \"Treasuries\" (fee-free at major brokers, can sell before maturity).\n\n**When do I owe taxes on T-bill interest?**\nT-bill interest is earned at maturity (for discount bills) and reported in that tax year. You will receive a 1099-INT.\n\n**What is the safest option?**\nBoth are effectively risk-free. T-bills are backed by the U.S. government with no per-depositor limit; HYSAs are FDIC-insured up to $250k.\n\n**Can I set up T-bill auto-reinvestment?**\nYes. TreasuryDirect and most brokerages allow automatic reinvestment at maturity into the same or a specified term.\n\n## Where to go next\n\nExplore related options with [High-yield savings rates in 2026](/blog/high-yield-savings-rates-now-2026), [Best CD rates in 2026](/blog/best-cd-rates-2026), and [How to beat inflation in 2026](/blog/how-to-beat-inflation-2026).","hue":280,"metaTitle":"Treasury Bills vs Savings Accounts 2026: After-Tax Yield","metaDescription":"T-bills vs HYSAs in 2026: compare after-tax yield, liquidity, and risk. Learn when the state-tax exemption on T-bills makes them the clear winner.","keywords":["treasury bills vs savings account 2026","t-bills vs hysa 2026","t-bill state tax exemption 2026","after-tax yield t-bills 2026","treasury direct 2026","4 week t-bill rate 2026","should i buy t-bills or hysa 2026","short term treasury vs savings 2026","t-bill liquidity 2026","best risk-free yield 2026"],"tldr":["**T-bills are exempt from state and local income tax** — in high-tax states this edge can be worth 0.3–0.8% in after-tax yield.","**Headline yields are close** — 4-week to 6-month T-bills and top HYSAs are often within 0.2–0.4% of each other in mid-2026.","**T-bills have a maturity lock** — you cannot access your money until the bill matures (4, 8, 13, 17, 26, or 52 weeks).","**HYSAs offer daily liquidity** — keep your emergency fund in a HYSA; use T-bills for the portion you can park for at least 4 weeks.","**Skip:** buying T-bills directly if you already hold a brokerage money market fund that holds T-bills — you are likely already getting the benefit with more liquidity."],"readTime":"4 min read","wordCount":872},"related":[{"slug":"treasury-bills-vs-cds-2026","title":"Treasury bills vs CDs in 2026: which one wins for cash savings","excerpt":"T-bills vs CDs in 2026 — which actually pays more after taxes, where to buy each, and when one beats the other.","category":"finance","date":"January 19, 2026","author":"ByteLedger Team","readTime":"3 min read","hue":290},{"slug":"how-to-buy-treasury-bills-2026","title":"How to buy Treasury bills in 2026: TreasuryDirect vs brokerage step-by-step","excerpt":"Two paths to buy T-bills in 2026 — TreasuryDirect (free, clunky) or your brokerage (easier, sometimes a small markup). Here's the right call by use case.","category":"finance","date":"February 4, 2026","author":"ByteLedger Team","readTime":"3 min read","hue":275},{"slug":"treasury-ladder-vs-money-market-2026","title":"Treasury Ladder vs Money Market: Where to Park Cash","excerpt":"Both hold short-term government debt and they behave differently on taxes, liquidity, and effort. Here is how to choose for a specific pot of money.","category":"finance","date":"August 16, 2026","author":"ByteLedger Team","readTime":"4 min read","hue":272}],"sameCategory":[{"slug":"83b-election-explained-2026","title":"The 83(b) Election: A Form With a Hard Deadline","excerpt":"Filing an 83(b) election taxes restricted stock at grant instead of at vesting, which for early-stage equity is usually a large win. The deadline is unforgiving.","category":"finance","date":"August 19, 2026","author":"ByteLedger Team","readTime":"4 min read","hue":284},{"slug":"beneficiary-audit-guide-2026","title":"Beneficiary Audit: The Form That Overrides Your Will","excerpt":"A beneficiary designation on a retirement account beats whatever your will says. Most people set theirs once, at hiring, and never look again.","category":"finance","date":"August 19, 2026","author":"ByteLedger Team","readTime":"5 min read","hue":283},{"slug":"bonus-depreciation-2026","title":"Bonus Depreciation: Writing Off Equipment in Year One","excerpt":"Buying a $60,000 machine and deducting all of it immediately changes the arithmetic of a purchase. It also changes what happens if you sell it three years later.","category":"finance","date":"August 19, 2026","author":"ByteLedger Team","readTime":"5 min read","hue":288},{"slug":"deferred-comp-explained-2026","title":"Deferred Compensation: Deferring Tax and Taking Credit Risk","excerpt":"Non-qualified deferred compensation postpones tax on income you have earned, and leaves it exposed to your employer's solvency. Here is the trade.","category":"finance","date":"August 19, 2026","author":"ByteLedger Team","readTime":"3 min read","hue":293}],"newer":{"slug":"swift-vs-flutter-2026","title":"Swift vs Flutter for iOS Apps in 2026: Native or Not","excerpt":"A practical Swift vs Flutter comparison for building iOS apps in 2026, covering native depth, reach, hiring, and a clear rule for when to choose each.","category":"code","date":"April 26, 2026","author":"ByteLedger Team","readTime":"4 min read","hue":145},"older":{"slug":"weekly-vs-monthly-budget-2026","title":"Weekly vs Monthly Budget: Which Works Better in 2026","excerpt":"A plain-language look at the weekly vs monthly budget question for 2026 — how each cycle works, who it suits, and the trap most people fall into.","category":"finance","date":"April 26, 2026","author":"ByteLedger Team","readTime":"4 min read","hue":38}}