Monthly Income from T-Bills Calculator
T-Bills don't pay monthly interest — they pay a lump sum at maturity. This calculator shows you exactly how much you need to invest to hit your income goal, and what your actual cash flow schedule looks like for each T-Bill duration. No fictional monthly splits.
How much do I need to invest for a target monthly income?
The amount you want to receive each month (or equivalent period).
Use the current auction rate from TreasuryDirect.gov.
Cash arrives as a lump sum every 182 days — not a monthly payment.
How T-Bill Income Actually Works
T-Bills pay nothing until maturity — then you receive the full face value in one lump sum. Your earnings are the difference between what you paid and what you receive. There is no interest payment, no coupon, and no monthly distribution.
True monthly income from T-Bills is only achievable with 4-week bills, which mature every 28 days. For all other durations, income arrives as a lump sum every 91, 182, or 364 days.
The Only Strategy That Delivers True Monthly Cash Flow
A 4-week rolling ladder is the only T-Bill approach that generates cash on a near-monthly basis on day 1. Here's how it works in practice:
- Decide your target monthly income and let this calculator work out the face value needed.
- Buy 4 separate 4-week T-Bills — but purchase one per week over the first 4 weeks, not all at once.
- From Week 5 onward, one bill matures every week. Collect your earnings.
- Reinvest the returned face value into a new 4-week bill immediately to keep the ladder running.
What Longer-Duration Bills Actually Deliver
A 26-week T-Bill earning $1,000 at maturity does not give you $167/month — it gives you nothing for 182 days, then $1,000 on day 182. If you need cash in month 3, it simply is not available.
That said, longer bills typically offer higher yields and require less capital for the same annualised return. If your income need is quarterly or semi-annual — rental income top-ups, estimated tax payments, or a regular savings transfer — a 13-week or 26-week bill may suit you better than a 4-week ladder.
How Much Do You Need for $1,000/Month?
At a 4.5% discount rate using 4-week T-Bills, you need approximately $268,000 in total face value across a rolling ladder to generate around $1,000 per 28-day maturity. At 5%, that drops to roughly $241,000. Use the calculator above to get the exact figure at the current auction rate.
For 26-week bills, generating the equivalent of $1,000/month (as a lump sum of $6,000 every 6 months) requires a face value of around $264,000 at 4.5% — similar capital, but you only receive that cash twice a year.
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
Can T-Bills generate monthly income?
Yes — but not from a single T-Bill. A T-Bill ladder strategy staggers multiple T-Bills so one matures each month, creating regular cash flow. For example, buying six 26-week T-Bills staggered one month apart generates one maturity per month after the first six months.
Do T-Bills pay monthly interest?
No — T-Bills are zero-coupon instruments. They do not pay periodic interest. Instead, you receive the full face value at maturity and the difference from your purchase price is your earnings. 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?
At a 4.5% discount rate using 26-week T-Bills, you need approximately $267,000 invested across a ladder to generate around $1,000 per month. At 5%, that drops to roughly $240,000. Use the reverse calculator on this page to find your exact required investment.
Is T-Bill monthly income stable?
It is relatively stable but not fixed. Each rollover is priced at the current auction rate, so your income changes slightly with each new T-Bill purchase. In a stable rate environment, monthly income is very consistent. In volatile rate periods, it can fluctuate.