Treasury Bill vs Savings Bond Comparison Calculator

How T-Bills and Savings Bonds Differ

Treasury bills (T-bills) are short-term U.S. government securities maturing in 4, 8, 13, 17, 26, or 52 weeks. They are sold at a discount to face value, with the difference being your interest. T-bills are exempt from state and local income tax. The current secondary-market yield reflects Federal Reserve policy plus a small term premium; auction yields are published weekly (source: treasurydirect.gov).

U.S. savings bonds come in two flavors: Series EE (fixed rate, guaranteed to double in 20 years) and Series I (composite rate combining a fixed component plus an inflation adjustment that resets every six months). Both are 30-year instruments with a 12-month minimum holding period and a 3-month interest penalty for redemption before 5 years. Federal tax is deferred until redemption, and state/local taxes never apply. The $10,000 per-person annual purchase limit applies to each series.

T-Bills — Liquidity and Reinvestment Risk

T-bills offer near-perfect liquidity. They can be sold on the secondary market any business day, and at maturity they automatically credit cash. The drawback is reinvestment risk — every 4 to 52 weeks you must roll the proceeds into a new bill at whatever yield prevails. When the Fed cuts rates, your rollover yields drop. The Treasury auction calendar makes laddering straightforward: spread maturities so something matures each month.

T-bill yields closely track the federal funds rate. As of early 2026, the Fed held rates at 4.25-4.50% after January's FOMC meeting, with 4-week and 13-week bill yields near 4.3-4.4% per the U.S. Treasury daily yield curve (source: treasury.gov). If you expect rates to fall meaningfully, locking in a 5-year savings bond or longer-dated Treasury note may beat continually rolling bills.

Savings Bonds — Tax Deferral and Inflation Hedge

The federal-tax deferral is meaningful for taxable-brokerage savers. You report interest only when you redeem the bond (or at the 30-year final maturity, whichever is earlier). This can effectively defer the tax bill until retirement when your marginal rate may be lower. Series I bonds also hedge against inflation — the variable component resets every six months based on CPI-U. When inflation spikes, your I-bond yield jumps; when inflation cools, the variable portion drops to zero but the fixed component continues paying.

Series EE bonds carry a unique guarantee: the Treasury promises the bond will be worth at least double its purchase price after 20 years, regardless of the stated fixed rate. That equates to a guaranteed compound annual yield of about 3.5%. If the stated rate climbs above 3.5% before year 20, you get the higher accrued rate instead. This guarantee makes EE bonds a unique 20-year long-bond proxy with no interest-rate risk.

Education Exclusion and Other Tax Wrinkles

The Treasury offers an education savings bond exclusion: federal interest on Series EE and I bonds can be excluded from income if used for qualified higher education expenses in the year of redemption, subject to income limits and phase-outs (source: treasurydirect.gov). T-bills have no equivalent exclusion. For more on the inflation-hedge comparison, see our I-bond vs TIPS comparison and I-bond vs CD laddering. For the broader yield curve, see our Treasury yield calculator.

Last updated April 2026. Sources: treasurydirect.gov, treasury.gov, irs.gov.