T-Bill Monthly Income Calculator (How Much to Invest for $X per Month)
Want regular income from T-Bills? Enter your target amount and this calculator shows exactly how much you need to invest — and when you actually get paid. No guesswork, no fictional monthly splits.
How to Generate Monthly Income from T-Bills
To create consistent monthly cash flow from Treasury bills, you need to use a rolling ladder strategy.
- Step 1: Choose 4-week T-Bills for near-monthly income
- Step 2: Buy one bill per week for 4 weeks
- Step 3: From week 5, one bill matures every week
- Step 4: Reinvest the principal and keep the earnings
This approach creates a steady T-Bill income strategy without waiting months between payments.
How T-Bill Income Actually Works
T-Bills do not pay monthly interest. They work like this: you pay slightly less than the face value today, and the government pays you back the full face value when the bill matures. Your profit — the difference — is your income. It all arrives in one lump sum at maturity.
Only 4-week T-Bills mature often enough to give you near-monthly cash flow. All other durations pay out every 2, 3, 4, 6, or 12 months.
How the Formula Works
- Face value needed = Target income ÷ (Rate ÷ 100 × Days ÷ 360)
- You pay = Face value − Earnings
- Your earnings = Face value × Rate × Days ÷ 360
Step 1 — Face value needed per bill:
$1,000 ÷ (4.5% × 28 ÷ 360) = $1,000 ÷ 0.0035 = $285,715 (rounded up to $286,000)
Step 2 — Split across 4 bills:
$286,000 ÷ 4 = $71,500 per bill
Step 3 — What you actually pay per bill:
$71,500 − ($71,500 × 4.5% × 28/360) = $71,250.25 per bill
Step 4 — What you earn per maturity:
$71,500 × 4.5% × 28/360 = $249.75 every 28 days
Buy one bill per week for the first 4 weeks. From Week 5, one matures every week. Each time, pocket your earnings and reinvest the face value into a new 4-week bill.
What Longer Bills Actually Pay
A 26-week T-Bill pays you nothing for 182 days, then delivers one lump sum. If you need $1,000/month but chose a 26-week bill, you would get $0 for 6 months, then a single payment. That is not monthly income — it is semi-annual income. The calculator shows you the exact dates so there are no surprises.
Longer bills do earn slightly higher rates and work well for quarterly or semi-annual cash needs like estimated tax payments or top-ups to a savings account.
How Much Do You Need for $1,000/Month?
At 4.5% using 4-week T-Bills: approximately $286,000 in total face value.
At 5%: approximately $257,000.
Use the calculator above to get the exact number for today's rate.
T-Bill Income vs Other Monthly Income Options
| Option | True monthly? | Safety | Approx. yield | State tax |
|---|---|---|---|---|
| 4-week T-Bill ladder | Yes — every 28 days | US government backed | 4–5% | Exempt |
| 26-week T-Bill | No — lump sum every 6 months | US government backed | 4–5% | Exempt |
| High-yield savings account | Yes — monthly interest | FDIC up to $250K | 3.5–4.5% | Taxable |
| Money market fund | Yes — daily accrual | Low risk, not FDIC | 4–5% | Varies |
| CD (certificate of deposit) | Depends on term | FDIC up to $250K | 4–5% | Taxable |
| Dividend stocks | Mostly quarterly | Market risk | 2–4% | Taxable |
Related Calculators
Learn more: What Are Treasury Bills — Complete Guide · Best T-Bill Duration Guide · Are T-Bills Worth It?
Frequently Asked Questions (FAQ)
Can T-Bills generate monthly income?
Yes, T-Bills can generate monthly income using a ladder strategy. By staggering multiple T-Bills so one matures each month, you create regular cash flow. For example, buying six 26-week T-Bills one month apart produces one maturity per month after the first six months.
Do T-Bills pay monthly interest?
No, T-Bills do not pay monthly interest. They are zero-coupon securities, meaning you receive all earnings at maturity. To create monthly income, you need a ladder of multiple T-Bills.
How much do I need to invest for $1,000 per month from T-Bills?
You need roughly $240,000 to $270,000 to earn $1,000 per month from T-Bills. The exact amount depends on the current rate and duration. Use the calculator above to find your precise investment requirement.
Is T-Bill monthly income stable?
T-Bill monthly income is relatively stable but not fixed. Each reinvestment uses the current auction rate, so income may change slightly over time. In stable rate environments, income remains consistent.