T-Bill Calculator
Calculate treasury bill purchase price, earnings, yield, and after-tax returns based on discount rate and maturity period.
Minimum $1,000. You get this full amount back at maturity.
Check latest rate → TreasuryDirect.gov
T-Bills are exempt from state tax. Only federal tax applies.
What is a Treasury Bill (T-Bill)?
Think of a T-Bill as a short-term IOU from the U.S. government. You lend the government money for a fixed period — anywhere from 4 weeks to 1 year — and they pay you back more than you put in. The profit is your interest. Since it's backed by the U.S. government, it's considered one of the safest places to park cash in the world.
Unlike a savings account that pays interest monthly, a T-Bill pays everything at once when it matures. You buy it at a slight discount, and receive the full face value back at the end.
How T-Bill Calculation Works — Step by Step
T-Bills work differently from a regular savings account. Instead of earning interest on top of your deposit, you pay less upfront and receive the full amount at the end. Here's exactly how it works, in plain numbers:
The formula (the calculator does this automatically):
- Discount = Investment × Rate ÷ 100 × Days ÷ 360
- You Pay = Investment − Discount
- Annual Return = (Discount ÷ You Pay) × (365 ÷ Days) × 100
Step 1 — How much do you actually pay?
The government discounts the price based on the interest rate and duration:
Discount = $10,000 × 4.5% × (182 days ÷ 360) = $227.50
You pay: $10,000 − $227.50 = $9,772.50 upfront
Step 2 — What do you get back?
After 182 days (6 months), the government pays you the full $10,000.
Your profit: $10,000 − $9,772.50 = $227.50
Step 3 — What's your annual return?
($227.50 ÷ $9,772.50) × (365 ÷ 182) × 100 = 4.67% per year
This is slightly higher than 4.5% because your return is calculated on what you actually paid ($9,772.50), not the full $10,000.
In plain English: You hand over $9,772.50 today. Six months later the government hands you back $10,000. You made $227.50 doing nothing — that's a 4.67% annual return.
Why Is the Annual Return Higher Than the Interest Rate?
You might notice the calculator shows 4.67% when you entered 4.5%. This is normal and correct. The 4.5% "discount rate" is calculated on the full $10,000 face value. But your actual return is calculated on what you paid — $9,772.50 — which is a smaller number. Dividing by a smaller number gives you a slightly higher percentage. The annual return (4.67%) is the more accurate measure of what your money is actually earning.
T-Bills and Tax — What You Need to Know
T-Bill earnings are taxed by the federal government like regular income — you'll receive a 1099-INT form at tax time showing your earnings. However, T-Bills have one major tax advantage: they are completely exempt from state and local taxes. This is written into federal law and applies in every state.
If you live in a high-tax state like California (13.3% state tax) or New York (10.9%), this exemption can be worth more than the headline interest rate suggests. A T-Bill at 4.5% can easily beat a savings account or CD offering 5% once you factor in state tax on the CD earnings. Use our After-Tax Yield Calculator to see the exact comparison for your state.
T-Bill Duration Guide
T-Bills are available in six standard durations. Choose the one that best fits your cash needs:
| Duration | Days | Best For | Calculator |
|---|---|---|---|
| 4-Week | 28 | Maximum flexibility | 4-Week Calculator |
| 8-Week | 56 | Short-term cash parking | Use this calculator |
| 13-Week | 91 | Beginners, quarterly planning | 13-Week Calculator |
| 17-Week | 119 | Flexible mid-term | Use this calculator |
| 26-Week | 182 | Most popular — best balance | 6-Month Calculator |
| 52-Week | 364 | Maximum yield | 1-Year Calculator |
Not sure which duration to pick? Read our Best T-Bill Duration Guide for a full breakdown including how the rate environment affects your choice.
Compare T-Bills With Other Investments
T-Bills are one of several safe short-term options. Use these calculators to see which wins after taxes:
Learn more: What Are Treasury Bills — Complete Guide · Are T-Bills Worth It? · How Much Can I Earn from T-Bills?
Frequently Asked Questions (FAQ)
How does the T-Bill calculator work?
The T-Bill calculator uses the official U.S. Treasury formula to calculate your earnings. Enter your investment amount, rate, and duration to calculate purchase price, profit, and annual yield. The calculation uses a 360-day basis for discount and a 365-day basis for yield comparison.
What is the difference between discount rate and yield?
The discount rate is used to price the T-Bill, while the yield shows your actual return. The discount rate is applied to the face value on a 360-day basis, while yield is calculated on the lower purchase price using a 365-day basis. This is why yield is always slightly higher than the discount rate.
Is this T-Bill calculator accurate?
Yes, the T-Bill calculator is accurate and uses the official U.S. Treasury formula. It follows the bank-discount method used by TreasuryDirect and major brokerages to calculate purchase price, earnings, and yield.
What face value should I enter?
Enter the amount you want to receive at maturity. T-Bills are sold in $100 increments with a minimum of $100 on TreasuryDirect. Most investors use values like $10,000 or $25,000.
Where can I find the current T-Bill rate?
You can find the current T-Bill rate on TreasuryDirect.gov under auction results. Rates are updated weekly after each auction, and brokerages like Fidelity and Schwab also display current T-Bill rates.