Bills at a Glance (TreasuryDirect, accessed October 2026)
- Terms: 4, 6, 8, 13, 17, 26 and 52 weeks. The 52-week bill is auctioned every four weeks, the rest weekly.
- Amounts: minimum $100, in $100 increments; up to $10 million per auction with a non-competitive bid.
- Interest: the difference between the price and the face value, paid when the bill matures.
- Taxes: federal income tax applies; state and local income taxes do not (31 U.S.C. 3124). Cash-basis individuals report the interest for the year the bill matures, per IRS Publication 550.
- Selling early: allowed, through a bank or broker; the price then depends on current rates and may be below what you paid plus accrued interest.
The Formulas Treasury Uses, With a Worked Example
For the default 26-week bill (182 days) at a 3.85% discount rate:
- Price: P = 100 × (1 − 0.0385 × 182 ÷ 360) = 98.053611 per $100. For $10,000 face, $9,805.36.
- Interest: $10,000 − $9,805.36 = $194.64.
- Investment rate (for terms of half a year or less): (100 − P) ÷ P × 365 ÷ days = 1.946389 ÷ 98.053611 × 365 ÷ 182 = 3.981%.
- Longer bills: for the 52-week bill Treasury solves a quadratic that allows for a mid-year coupon: a = days ÷ (2 × 365) − 0.25, b = days ÷ 365, c = (P − 100) ÷ P, rate = (−b + √(b² − 4ac)) ÷ 2a. The calculator switches to it above 182 days.
- Taxable-equivalent yield: 3.981% ÷ (1 − 0.05) = 4.190% for a 5% state income tax.
The discount rate understates the return because it divides by face value and uses a 360-day year; compare the investment rate with CDs and savings accounts. The formulas reproduce published auctions: a 26-week bill sold January 3, 2023 at 97.656750 had a 4.635% discount rate, and a 17-week bill sold November 23, 2022 at 98.545556 had a 4.527% investment rate.
Today’s Bills Run Through the Calculator (October 21, 2026)
Discount rates are Treasury’s daily bill rates for October 21, 2026, on $10,000 of face value and a 5% state tax. The calculator’s investment rate lands within 0.01 percentage point of Treasury’s own coupon-equivalent figure for every term.
Rates move every business day, and longer bills paid a little more than short ones on this date. The state-tax advantage is worth more the higher your state rate; in a state with no income tax the taxable-equivalent yield equals the investment rate.
Common Mistakes With T-Bill Yields
- Comparing the discount rate with a CD’s APY. The discount rate is the lowest of the three figures; compare the investment rate (or the APY if you will keep rolling).
- Forgetting the state exemption. A 4.4% CD and a 4.36% bill are not equal for someone in a high-tax state; the bill comes out ahead after state tax.
- Expecting interest during the term. Bills pay nothing until maturity; the price you pay is already reduced by the interest.
- Assuming the rollover rate stays the same. The APY figure assumes you reinvest at today’s rate, which changes at every auction.
- Using the wrong day count. A 26-week bill is 182 days and a 52-week bill 364; the 6-week bill (42 days) is not in the menu, so use the closest term only as an estimate.
What the Calculator Does Not Handle
It prices bills bought at auction and held to maturity. It does not price a bill bought or sold on the secondary market partway through its term, does not include brokerage fees, and treats the federal bracket as a flat rate on the interest. Leap-year (366-day) conventions and cash management bills are not modeled. For tax questions about interest reporting, see the 1099-INT you receive or ask a tax professional.
Frequently Asked Questions
How is a T-bill price calculated?
Price per $100 = 100 × (1 − discount rate × days to maturity ÷ 360). Multiply by your face value ÷ 100.
What is the difference between the discount rate and the investment rate?
The discount rate uses face value and a 360-day year; the investment rate uses the price you paid and a 365-day year, so it is higher and comparable to other yields.
Are T-bills taxed by my state?
No. Interest is subject to federal income tax but exempt from state and local income tax.
When do I pay tax on T-bill interest?
Generally in the year the bill matures, when the interest is paid. A bill bought in November that matures in February is taxed the following year.
What is the minimum to buy a Treasury bill?
$100, in $100 increments, through TreasuryDirect or a bank or broker.
Can I sell a T-bill before it matures?
Yes, through a bank or broker. TreasuryDirect holdings must be transferred to a broker first; the price depends on rates at the time.
Are T-bills better than a high-yield savings account?
They are backed by the U.S. government and exempt from state tax, but your money is fixed until maturity. Compare the taxable-equivalent yield with the account’s APY.
How to Use This Calculator
- Enter the face value — the amount you receive at maturity, in $100 increments.
- Choose the term — 4, 8, 13, 17, 26 or 52 weeks (days to maturity are shown).
- Enter the discount rate — the high rate from the latest auction result or your broker’s quote.
- Add your tax rates — your state income tax rate and federal bracket for the state-tax advantage and after-tax interest.
- Read the results — price per $100, what you pay, interest, investment rate, APY if rolled over, taxable-equivalent yield and federal tax.
📚 Sources & References- [1] U.S. Treasury. Daily Treasury Bill Rates, Oct 21, 2026. home.treasury.gov
- [2] TreasuryDirect. Treasury Bills: terms, minimums, taxes (accessed Oct 2026). www.treasurydirect.gov
- [3] TreasuryDirect. Price, yield and rate calculations for a Treasury bill (formulas, 2004). www.treasurydirect.gov
- [4] TreasuryDirect. Auction results, 26-week bill, January 3, 2023 (price 97.656750, rate 4.635%). www.treasurydirect.gov
- [5] TreasuryDirect. Auction results, 17-week bill, November 23, 2022 (investment rate 4.527%). www.treasurydirect.gov
- [6] 31 U.S.C. 3124, Exemption from taxation (accessed Oct 2026). www.law.cornell.edu
- [7] IRS. Publication 550, Investment Income and Expenses (accessed Oct 2026). www.irs.gov
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