How this calculator works
T-bills are bought at a discount: the discount rate uses a 360-day year on face value, while the investment yield uses 365 days on the price you pay. Notes and bonds pay half the coupon every six months. Yield to maturity is approximated from the coupon plus the yearly share of any discount or premium.
Worked example
With the example values below: Investment yield, 4.093% (earn $200.00 in 26 weeks). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Security | Treasury bill |
| Face value | $10,000 |
| Purchase price | $9,800 |
| Term | 26 weeks |
Bills, notes and bonds
All are backed by the US government, and their interest is exempt from state and local income tax.
| Security | Term | How it pays |
|---|---|---|
| T-bill | 4 to 52 weeks | Bought at a discount; full face value at maturity |
| T-note | 2 to 10 years | Fixed coupon every six months |
| T-bond | 20 or 30 years | Fixed coupon every six months |
| TIPS | 5, 10 or 30 years | Principal adjusts with inflation |
How T-bill yields are quoted
T-bills are quoted on a discount basis: the discount divided by face value, scaled to a 360-day year. A 26-week bill bought for $9,800 per $10,000 has a discount rate of about 3.96%. The investment yield divides the $200 discount by the $9,800 you actually paid and uses 365 days, giving about 4.09%.
Use the investment yield to compare T-bills with CDs and savings accounts.
Prices and yields move in opposite directions
If you sell a note or bond before maturity, its price depends on current rates. When rates rise, existing bonds with lower coupons fall in price; when rates fall, they rise. Held to maturity, you receive the full face value regardless. Yield to maturity estimates your total annual return if you buy at today's price and hold to the end.
For short-term savings, T-bills limit that price risk. Compare them with CDs and high-yield savings.
Frequently asked questions
What is a Treasury bill?
A short-term loan to the US government, with maturities from 4 to 52 weeks. T-bills pay no coupon. You buy them below face value and receive the full face value at maturity, and the difference is your interest.
How do I buy Treasury bills?
Through TreasuryDirect, the government's site, where you bid at auction, or through a brokerage account, which can buy at auction or on the secondary market. Brokerages make it easier to sell before maturity.
Are Treasury bills taxable?
T-bill interest is subject to federal income tax but exempt from state and local income tax. That makes them worth more after tax than a CD or savings account at the same yield if you live in a high-tax state.
What's the difference between the discount rate and the investment yield?
The discount rate is the discount divided by face value on a 360-day year, which is how T-bills are quoted. The investment yield (bond-equivalent yield) divides the discount by the price you actually pay on a 365-day year. It's always a bit higher and is the one to compare with CDs and savings rates.
How much does a $10,000 Treasury bill cost?
Less than $10,000, because T-bills are sold at a discount. The price is face value × (1 − discount rate × days ÷ 360). At a 4% discount rate, a 26-week (182-day) bill costs about $9,798, and you get $10,000 back at maturity, so you earn about $202.
How much does a $10,000 Treasury bond pay?
The coupon rate times the face value each year, paid in two halves. A $10,000 bond with a 4.5% coupon pays $450 a year, $225 every six months, until it matures, and then returns the $10,000. Over 30 years that's $13,500 in interest.
What happens if I sell a Treasury before maturity?
You get the current market price, which can be above or below what you paid depending on how rates have moved. Held to maturity, you always receive the full face value.
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Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.