Every option here is backed by the U.S. government or FDIC insurance, so the choice comes down to three things: what you earn after tax, whether it beats inflation, and when you can get the money back. Here they are side by side at rates published in October 2026.
Assumptions: a 22% federal bracket and a 5% state income tax. Treasury securities and savings bonds are exempt from state tax; CD and bank interest are not. “After inflation” subtracts either the market’s 5-year break-even inflation rate on October 21, 2026 (4.95% nominal minus 2.55% real = 2.40%) or the CPI-U change over the 12 months to September 2026 (3.74%, BLS).
| Option | Rate | After tax | After tax and 2.40% inflation | After tax and 3.74% inflation | Rate source and notes |
|---|---|---|---|---|---|
| 52-week Treasury bill | 4.49% | 3.50% | 1.10% | -0.24% | Coupon-equivalent yield, Oct 21, 2026 |
| 5-year Treasury note | 4.95% | 3.86% | 1.46% | 0.12% | Par yield, Oct 21, 2026 |
| 5-year TIPS | 5.01% | 3.91% | 1.51% | 1.24% | 2.55% real yield plus inflation (rate shown at 2.40% inflation); phantom income taxed yearly |
| Series I bond | 4.26% | 3.32% | 0.92% | -0.41% | Composite rate May-Oct 2026 (0.90% fixed); tax deferred, resets every 6 months |
| Series EE bond, held 20 years | 3.53% | 2.75% | 0.35% | -0.99% | Doubling guarantee; 2.40% stated rate |
| Series EE bond, cashed before 20 years | 2.40% | 1.87% | -0.53% | -1.87% | Stated fixed rate |
| 12-month CD (national average) | 1.73% | 1.26% | -1.14% | -2.47% | FDIC national rate, Sept 21, 2026 |
| Savings account (national average) | 0.37% | 0.27% | -2.13% | -3.47% | FDIC national rate, Sept 21, 2026 |
At these rates the Treasury options lead on after-tax return, and the 5-year note and TIPS lock it in longest. The TIPS row moves with inflation because its principal does; its after-tax real return still slips a little as inflation rises, because the inflation adjustment itself is taxed. The fixed-rate options lose real value point for point if inflation runs hotter than expected. The I bond’s rate would also reset upward with inflation, which the table does not show. The bank averages are low because they include many accounts paying little; top online savings and CD rates are higher, but are taxed by your state too. Bank deposits are FDIC insured up to $250,000 per depositor, per bank, per ownership category; for larger balances the FDIC coverage calculator shows how much is covered.
On $10,000 for a year, the 52-week bill earns about $350 after federal tax; the same money at the national-average 12-month CD rate earns about $126 after federal and state tax. An I bond held a full year earns its rate but cannot be cashed until month 12 and would lose 3 months of interest if cashed before 5 years; the 3-month penalty on a one-year hold leaves about three-quarters of a year’s interest.
| T-bills | TIPS | I bonds | EE bonds | |
|---|---|---|---|---|
| Minimum / maximum | $100 / $10 million per auction (non-competitive) | $100 / $10 million per auction | $25 / $10,000 a year electronic | $25 / $10,000 a year |
| Access before maturity | Sell anytime at market price | Sell anytime at market price | After 12 months; 3 months of interest lost before 5 years | After 12 months; 3 months of interest lost before 5 years |
| Federal tax | In the year the bill matures | Every year, including the inflation adjustment | Deferred until cashed (up to 30 years) | Deferred until cashed (up to 30 years) |
| State tax | Exempt | Exempt | Exempt | Exempt |
| Inflation protection | None (but rolls to new rates quickly) | Principal indexed to CPI-U, floor at par | Rate resets every 6 months with CPI-U | None |
New savings bond rates take effect each May 1 and November 1; the November 1, 2026 rates had not been published when this was written, so check TreasuryDirect before buying. TIPS are auctioned monthly, and 5-year TIPS come in April and October (new) and June and December (reopenings). Calendar-year limits on savings bonds reset January 1, so a couple can buy $10,000 each of I and EE bonds in late December and again in January.
At October 2026 rates the 52-week bill (4.49%) yields more than the I bond (4.26%), and it is easier to sell. The I bond’s rate resets with inflation and its tax is deferred, so it can come out ahead if inflation rises.
The 5-year TIPS real yield was 2.55% on October 21, 2026, so TIPS beat a 4.95% nominal note if inflation averages more than 2.40% over five years. They suit money you can hold to maturity.
No. Interest on Treasury securities and U.S. savings bonds is exempt from state and local income tax; federal tax still applies.
$10,000 per person per calendar year in electronic I bonds and $10,000 in electronic EE bonds, bought through TreasuryDirect.
Only TIPS and I bonds adjust for inflation. T-bills beat recent inflation after tax only when their yield is well above the inflation rate, which depends on the year.
You can if you sell before maturity after real yields rise, and deflation lowers the adjusted principal, but at maturity you receive at least the original par amount.