T-Bill vs CD Calculator
Enter your T-Bill rate, CD rate, tax bracket, and state to see which investment actually wins after all taxes. The headline rate doesn't tell the full story — state tax exemption often makes T-Bills more valuable than they appear.
Amount you plan to invest. Used as face value for T-Bill and principal for CD.
Current T-Bill auction rate from TreasuryDirect.gov.
CD will be compared over the same duration.
APY offered by your bank on a CD of the same duration.
Your marginal federal income tax bracket.
Enter your state's income tax rate. Examples: CA = 13.3%, NY = 10.9%, TX/FL = 0%. Find your rate →
T-Bill vs CD — Full Comparison
| Feature | T-Bills | CDs |
|---|---|---|
| Issuer | U.S. Government (Treasury) | FDIC-insured bank |
| Safety | U.S. Gov backed — no limit | FDIC insured up to $250,000 |
| Rate Type | Fixed at auction — locked in | Fixed for CD term |
| Federal Tax | ✅ Yes — ordinary income | ✅ Yes — ordinary income |
| State Tax | ✅ Exempt by federal law | ❌ Fully taxable |
| Early Exit | Sell on secondary market (broker) | Penalty — typically 3–6 months interest |
| Min. Investment | $100 on TreasuryDirect | Varies — typically $500–$1,000 |
| Over $250K | ✅ No limit — fully government backed | ❌ Not insured above $250K per bank |
| Auto-Reinvest | ✅ Yes — TreasuryDirect auto-rolls | ✅ Yes — most banks auto-renew |
When Does a T-Bill Beat a CD?
Because T-Bills are exempt from state tax, they have a built-in yield advantage over CDs in states with income tax. The higher your state tax rate, the bigger the T-Bill advantage.
| State | State Tax Rate | CD Rate Needed to Match T-Bill |
|---|---|---|
| Texas / Florida | 0% | 5.77% |
| Pennsylvania | 3.07% | 5.97% |
| New York | 8.82% | 6.36% |
| Oregon | 9.9% | 6.47% |
| California | 13.3% | 6.77% |
When Does a CD Beat a T-Bill?
- You live in a state with no income tax (TX, FL, NV, WA, WY, SD, AK) — the state tax advantage disappears
- A bank is offering a promotional CD rate significantly above current T-Bill rates
- You want longer than 1 year — T-Bills max out at 52 weeks; CDs can lock in rates for 2–5 years
- You prefer the simplicity of a bank product over TreasuryDirect
T-Bill vs CD After Tax — Example
T-Bill at 4.5%: Gross $227.50 → Federal tax $50.05 → State tax $0 (exempt) → After-tax: $177.45
CD at 5.0%: Gross $247.95 → Federal tax $54.55 → State tax $32.98 → After-tax: $160.42
✅ T-Bill wins by $17.03 despite having a lower headline rate.
Find the exact CD rate needed to beat your T-Bill after all taxes.
See your real after-tax T-Bill yield and CD equivalent rate.
Related Calculators
Learn more: What Are Treasury Bills — Complete Guide · Are T-Bills Worth It? · Best T-Bill Duration Guide
Frequently Asked Questions
Are T-Bills better than CDs?
It depends on your state tax rate. T-Bills are exempt from state and local taxes while CDs are fully taxable. In high-tax states like California (13.3%) or New York (8.82%), a T-Bill at 5% can easily beat a CD at 5.5% after all taxes. In states with no income tax like Texas or Florida, the comparison is nearly equal and comes down to the specific rates offered.
What is the main difference between T-Bills and CDs?
T-Bills are issued directly by the U.S. government with no FDIC limit required, are exempt from state and local tax, and can be sold on the secondary market via a brokerage. CDs are bank products insured by FDIC up to $250,000, are fully taxable at all levels, and charge early withdrawal penalties typically equal to 3–6 months of interest.
Can I withdraw from a T-Bill early like a CD?
On TreasuryDirect, you cannot sell a T-Bill before maturity — you must hold it to the end. However, if you purchased through a brokerage like Fidelity or Schwab, you can sell on the secondary market at any time without a penalty. The sale price may be slightly above or below your purchase price depending on current interest rates.
Which is better for amounts over $250,000 — T-Bills or CDs?
T-Bills are better for large cash holdings. CDs are only FDIC insured up to $250,000 per bank per account type. T-Bills are backed directly by the U.S. government with no insurance limit — making them the preferred choice for investors with more than $250,000 in cash to park safely.