How to use the Treasury bill calculator
- Enter the face value, the amount repaid at maturity. Enter 100 to work per $100, as auction results are quoted, or the dollar amount you plan to buy.
- Choose what you know. If you have the price you paid or will pay, choose Purchase price. If you have the discount rate from an auction announcement or a quote, choose Discount rate.
- Choose the term. The presets cover the standard bills (4, 6, 8, 13, 17, 26 and 52 weeks). For a bill bought in the secondary market, choose Custom and enter the days left to maturity.
- Set the year length. Treasury uses 366 days when the year after the issue date contains a February 29; otherwise leave 365.
- Add your state and local tax rate if you want the taxable-equivalent yield.
The T-bill yield formulas
Price from the discount rate: P = F × (1 − d × t ÷ 360)
Investment rate (t ≤ half a year) = (F − P) ÷ P × y ÷ t
Money market yield = (F − P) ÷ P × 360 ÷ tF is the face value, P the price, t the days to maturity and y the days in the year after the issue date (365 or 366).
For bills with more than half a year to maturity, the Treasury’s investment rate solves P × (1 + i ÷ 2) × (1 + (t − y ÷ 2) × i ÷ y) = 100, with P per $100 of face value:
A worked example
You buy a bill with 182 days to maturity and a face value of $10,000 for $9,800. At maturity you receive the full face value, a dollar return of $200.00.
Measured against face value on a 360-day year, the discount yield is 3.96%. Measured against the $9,800 you actually paid, on a 365-day year, the investment rate is 4.09%. The money market yield, against the price but on a 360-day year, is 4.04%. If you could roll the bill over at the same rate for a full year, it would compound to an effective 4.13%.
Why the discount rate understates the return
The discount rate is a quoting convention, not a return. It divides by the face value instead of the price, and by 360 days instead of 365, and both choices push it down. The gap grows with the term and with the level of rates:
| Bill at a 4% discount rate | Price per $10,000 | Investment rate | Money market yield |
|---|---|---|---|
| 13-week | $9,898.89 | 4.10% | 4.04% |
| 26-week | $9,797.78 | 4.14% | 4.08% |
| 52-week | $9,595.56 | 4.18% | 4.17% |
When you compare a T-bill with a CD, a savings account or a money market fund, use the investment rate or the effective annual yield, never the discount rate.
T-bills and state income tax
In the US, interest on Treasury securities is exempt from state and local income taxes, though it is fully taxable at the federal level. CDs, savings accounts and most money market funds pay interest that is taxed by both.
The calculator divides the investment rate by one minus your state and local rate to find the yield a fully taxable investment would need to match. With the example’s 5% rate, the 4.09% bill is worth the same as a taxable 4.31%; at a 9% rate, the equivalent rises to 4.50%. This simple version ignores any federal deduction for state taxes; if you itemize and deduct your state income tax, the true equivalent is a little lower.
What this calculator does not include
- Auction rounding. Treasury rounds prices to six decimals per $100; the calculator does not round, so results may differ in the last decimal.
- Settlement dates. Days to maturity are entered directly rather than counted from dates.
- Selling before maturity. If you sell a bill early, the price depends on rates at the time and the return can differ from the yield at purchase.