A Treasury bill (T-Bill) is a short-term U.S. government debt security that matures in one year or less. Unlike bonds, T-Bills don't pay periodic interest — they're sold at a discount to face value, and you receive the full face value at maturity. This calculator converts between purchase price and discount rate, computes the bond equivalent yield for apples-to-apples comparisons, and shows your after-tax profit accounting for the state tax exemption.
T-Bill Details
Minimum $100, in multiples of $100
Amount you pay at purchase (less than face value)
Bank discount rate from auction or secondary market
T-Bills are exempt from state and local taxes
Return Breakdown
For informational purposes only. Not financial or tax advice. Verify rates at TreasuryDirect.gov before investing.
How to Use the Treasury Bill Calculator
Treasury bills are among the safest investments available, backed by the U.S. government. But understanding their pricing and yields requires converting between discount rates and investment yields — two different ways of expressing the same return. This Treasury bill calculator does that conversion automatically and shows your after-tax profit.
Step 1: Enter the Face Value
The face value (also called par value) is what the Treasury pays you at maturity. T-Bills are sold in multiples of $100 with a minimum purchase of $100. Most investors buy in increments of $1,000 or $10,000.
Step 2: Choose the Maturity Term
T-Bills are available in six terms: 4, 8, 13, 17, 26, and 52 weeks. Shorter-term T-Bills offer more flexibility but require more frequent reinvestment decisions. Longer-term bills let you lock in today's rate. The 13-week (3-month) and 26-week (6-month) bills are the most liquid and widely traded.
Step 3: Enter Purchase Price or Discount Rate
You can enter either the dollar purchase price or the discount rate quoted at auction. T-Bill rates at TreasuryDirect.gov and most brokerages are quoted as bank discount rates — enter that directly. If you're buying on the secondary market and know your purchase price, use the price input instead.
Step 4: Understanding the Yields Shown
The discount yield expresses interest as a percentage of face value on a 360-day basis — the standard T-Bill quotation. The bond equivalent yield (BEY) is a more useful comparison metric because it expresses the return as a percentage of your actual investment cost using a 365-day year, making it comparable to APYs on savings accounts. The after-tax yield applies your federal marginal rate only — T-Bill income is exempt from state and local taxes.
Frequently Asked Questions
Is this Treasury bill calculator free?
Yes, completely free with no signup required. All calculations run in your browser — your financial data is never sent to any server.
Is my financial data private?
Absolutely. Everything runs entirely in your browser using client-side JavaScript. No data is transmitted or stored anywhere.
What is the difference between discount yield and investment yield?
Discount yield (bank discount rate) expresses interest as a percentage of face value using a 360-day year — the way T-Bills are quoted at auction. Investment yield (bond equivalent yield) expresses interest as a percentage of the purchase price using a 365-day year, making it comparable to other interest-bearing instruments.
How do I buy Treasury bills?
You can purchase T-Bills directly from the U.S. Treasury at TreasuryDirect.gov with no transaction fees, or through a brokerage like Fidelity, Vanguard, or Schwab. Minimum purchase is $100. T-Bills are sold at a discount to face value and mature at full face value, so your return comes from the price difference.
Are T-Bill gains subject to state income tax?
No. Interest earned on U.S. Treasury obligations, including T-Bills, is exempt from state and local income taxes. It is subject to federal income tax only. This makes T-Bills especially attractive in high-tax states like California, New York, and New Jersey.
What happens to my T-Bill at maturity?
At maturity, the Treasury deposits the full face value into your linked bank account or TreasuryDirect account. The difference between your purchase price and face value is your interest income, reported on Form 1099-INT for the tax year in which the T-Bill matures.
Can I sell a T-Bill before maturity?
Yes. T-Bills are highly liquid and trade in the secondary market. You can sell through a broker before maturity, though the price will reflect current market interest rates. If rates have risen since your purchase, you may receive less than face value; if rates have fallen, you may receive a premium.