T-Bill Calculator (Treasury Bill Yield)
Free T-Bill calculator: enter a Treasury bill's face value, term, and purchase price or discount rate to get its bank discount yield, investment yield, and effective annual yield.
What Is a Treasury Bill (T-Bill)?
A Treasury bill (T-bill) is a short-term debt security issued by the U.S. Treasury with a maturity of one year or less. Unlike a coupon bond, a T-bill pays no periodic interest -- instead, it is sold at a discount to its face value, and the return is simply the difference between the discounted purchase price and the full face value paid out at maturity.
Because a T-bill's return is baked into its purchase price rather than paid out as interest, the "rate" quoted at a Treasury auction (the bank discount yield) is not directly comparable to the annual percentage yield (APY) shown on a savings account or CD. This calculator converts a T-bill's discount rate or purchase price into three different yield figures so you can see the return the way it is quoted at auction, the way it compares to other bonds, and the way it compares to a compounding rate.
How to Use This T-Bill Calculator
- Enter the face value The amount the Treasury pays you at maturity, for example $10,000.
- Choose the term to maturity Pick one of the standard auction terms: 4, 8, 13, 17, 26, or 52 weeks.
- Switch to what you know If you know the purchase price, enter it directly. If you only know the quoted discount rate, switch to that mode instead.
- Read the three yield figures Compare the bank discount yield, investment yield, and effective annual yield to see the return from different angles.
Tips for getting more out of it
- If you are comparing a T-bill to a bank CD or savings account, use the effective annual yield here, not the bank discount yield -- the discount yield understates the return you actually earn.
- T-bills bought through TreasuryDirect or a broker are typically quoted with a discount rate; T-bills held in a money market fund usually show you a yield figure already, so check which number you have before choosing a mode above.
- Remember that T-bill interest is exempt from state and local income tax in the U.S., which can make its after-tax return more competitive than a CD or savings account paying a similar headline rate.
- Shorter terms (4 or 8 weeks) let you reassess rates more often when reinvesting, while longer terms (26 or 52 weeks) lock in today's rate for longer -- useful if you expect rates to fall.
When to Use a T-Bill Calculator
Comparing a Treasury auction result to your own numbers
Treasury auction results are published as a discount rate -- convert it to an investment yield to see the return the way you would compare it with a bond or CD.
Deciding between a T-bill and a CD or high-yield savings account
Convert the T-bill's discount rate to an effective annual yield so it lines up with the APY quoted on bank products.
Checking a broker-quoted purchase price
If your brokerage shows only a dollar purchase price for a T-bill, enter it directly to see the implied yields without doing the discount-rate math yourself.
T-Bill Glossary
- Face value (par value)
- The amount the Treasury pays the holder at maturity, regardless of the price paid to buy the bill.
- Discount rate
- The rate T-bills are quoted at when auctioned, expressed as a percentage of face value annualized on a 360-day basis -- not the same as the return you actually earn on the amount you paid.
- Bank discount yield
- The discount amount divided by the face value, annualized using a 360-day year -- the convention used to quote T-bill rates at auction.
- Investment yield (bond equivalent yield)
- The discount amount divided by the purchase price (not face value), annualized using a 365-day year -- this is the figure to use when comparing a T-bill's return with a coupon bond or another annualized rate.
- Effective annual yield
- The investment yield with compounding applied, assuming the same rate could be earned by rolling the bill over repeatedly across a full year.
- Term to maturity
- How long until the Treasury repays the face value. T-bills are auctioned in standard terms of 4, 8, 13, 17, 26, and 52 weeks.
T-Bill Calculator FAQ
Side Note -- Why T-Bills Became a Mainstream Savings Option Again
For most of the 2010s, near-zero short-term interest rates meant Treasury bills paid barely more than holding cash, so they were mostly a tool for institutional cash management rather than something individual savers thought about. That changed once short-term rates rose sharply, and T-bills started yielding more than many savings accounts and even some CDs -- while still carrying the full faith and credit of the U.S. government and, in the U.S., an exemption from state and local income tax.
This combination -- competitive short-term yields, no state tax, and government backing -- drove a wave of individual investors into buying T-bills directly at auction through TreasuryDirect, or indirectly through money market funds and brokerage "cash sweep" accounts that hold T-bills. The renewed attention also exposed how confusing the discount-rate quoting convention can be to people used to seeing a simple APY on a savings account, which is part of why yield converters like this one became more commonly searched for.
One quirk that regularly surprises first-time buyers is that T-bills settle and mature on specific weekdays tied to the auction calendar rather than on a round number of months, so the exact day count for a "13-week" bill is not always precisely 91 days. This calculator uses the standard day counts for each term, but always check the specific settlement and maturity dates on your actual holding for the exact number of days.