How this calculator works
This Treasury yield calculator supports two U.S. government savings instruments: T-bills and Series I Savings Bonds (I Bonds).
For T-bills, enter face value, purchase price (discount), and days to maturity. The calculator computes the dollar discount, investment yield (annualized return on amount invested using a 365-day year), bank discount yield (auction-style quote using face value and a 360-day year), and holding-period return. At maturity you receive face value.
For I Bonds, enter purchase amount, fixed rate, inflation rate, and holding years. The composite rate follows the Treasury formula combining fixed and inflation components. The tool projects ending balance with annual compounding at that composite rate and estimates the three-month interest penalty if redeemed before five years.
Tax treatment, purchase limits, and semiannual I Bond rate resets are simplified or omitted. Use results to compare Treasuries to bank products, not as official TreasuryDirect quotes.
What affects the result
- T-bill purchase price vs. face value — A deeper discount raises yield for the same maturity length.
- Days to maturity — Shorter bills annualize the same discount into a higher quoted yield.
- Yield convention — Investment yield and bank discount yield differ; compare like with like when benchmarking CDs or money market funds.
- I Bond fixed and inflation rates — Higher fixed or inflation inputs raise the composite rate and projected balance.
- Holding period for I Bonds — Longer holding increases compounding; under five years triggers the early redemption penalty on accrued interest.
- Purchase amount — Scales dollar results linearly; limits on annual I Bond purchases are not enforced here.
When to use this calculator
Use this tool when evaluating a T-bill auction or secondary-market purchase, or when deciding how long to hold I Bonds relative to CDs or high-yield savings.
Compare bank certificates with the CD calculator, normalize rate quotes with the APR and APY converter, or model non-Treasury growth with the compound interest calculator. Read the Treasury yield explained guide for auction mechanics and I Bond rate updates.
FAQ supplement
Which T-bill yield should I compare to a CD APY? Use investment yield on purchase price—it closest matches an investor’s annualized return. Bank discount yield is common in auction headlines but uses different conventions.
Do I Bonds always beat inflation? The composite rate includes inflation protection plus a fixed component, but rates reset every six months. Enter current published rates for planning.
Are Treasuries state-tax-free? T-bill interest is generally exempt from state and local income tax; federal tax still applies. This calculator does not subtract tax from proceeds.
Related calculators
Model bank CD maturity value with the CD calculator. Convert between nominal rates and APY using the APR and APY converter. Project long-term savings growth with the compound interest calculator.
FAQ
What is the difference between T-bill yields shown?
Investment yield annualizes your return based on purchase price and days held. Bank discount yield uses face value and a 360-day year—the quote format often seen at Treasury auctions. Both describe the same discount but use different conventions.
How are T-bills taxed?
T-bill discount is generally taxable as interest at the federal level and exempt from state and local income tax. This calculator does not model tax owed or tax-deferred account treatment.
How is the I Bond composite rate calculated?
The composite rate combines a fixed rate and semiannual inflation component using the Treasury formula: fixed rate plus two times the inflation rate plus fixed times inflation. Enter rates as published by TreasuryDirect.
What is the I Bond early redemption penalty?
Redeeming I Bonds within five years forfeits the last three months of interest. The calculator estimates that penalty when holding period is under five years.
Are I Bond purchase limits included?
No. Annual purchase limits ($10,000 electronic per SSN, etc.) are not enforced in the calculator. Use it to project growth on the amount you enter.
Does this compare T-bills to CDs?
You can compare T-bill investment yield to CD APY using similar terms, remembering T-bills use discount pricing and CDs use stated APY. Use the CD calculator for bank certificate scenarios.
What holding period should I use for I Bonds?
Use the years you realistically plan to hold before redemption. Rates reset every six months; this tool applies your entered fixed and inflation rates for the full period as a simplified projection.
Is Treasury yield guaranteed?
T-bills return the stated discount if held to maturity. I Bond composite rates change with inflation updates. Past or entered rates do not guarantee future returns.