Treasury Yield Calculator
Calculate yields on U.S. Treasury securities — T-Bill discount yield, T-Note and T-Bond yield to maturity, tax-equivalent yield, and after-tax annual income. Compare treasuries against CDs, savings accounts, and municipal bonds.
| Investment | Pre-Tax Yield | After-Tax Yield | Annual on $10K |
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How Treasury Yields Are Calculated
A treasury yield calculator converts the price you pay for a U.S. government security into an annualized rate of return, letting you compare T-Bills, T-Notes, and T-Bonds on equal footing. Treasury securities are issued by the U.S. Department of the Treasury through TreasuryDirect.gov and are backed by the full faith and credit of the U.S. government, making them the benchmark "risk-free" rate.
T-Bills are sold at a discount and pay no coupon — your return is the difference between the purchase price and face value. The discount yield = ((Face - Price) / Face) × (360 / days). The bond-equivalent yield (BEY) annualizes that return on a 365-day basis: BEY = ((Face - Price) / Price) × (365 / days). For T-Notes and T-Bonds, which pay semiannual coupons, the key metric is yield to maturity (YTM) — the internal rate of return assuming you hold to maturity and reinvest all coupons at the same rate. YTM is solved iteratively because it appears in both the discount factor and the annuity formula.
Treasury Securities Types Compared in 2026
The U.S. Treasury issues five main types of marketable securities, each serving different investor needs:
- T-Bills (4 to 52 weeks): Zero-coupon, sold at discount. Ideal for short-term parking of cash. Minimum purchase $100 on TreasuryDirect.
- T-Notes (2 to 10 years): Pay semiannual coupons. The 10-year note yield is the most-watched benchmark in global finance, influencing mortgage rates and corporate borrowing costs.
- T-Bonds (20 and 30 years): Longest-duration treasuries. Higher interest rate risk but lock in yields for decades. Useful for pension funds and retirement planning.
- TIPS (Treasury Inflation-Protected Securities): Principal adjusts with CPI. Protects against inflation but pays a lower real yield. Available in 5, 10, and 30-year maturities.
- I-Bonds (Series I Savings Bonds): Composite rate = fixed rate + inflation rate, adjusted every 6 months. Purchase limit $10,000/year per SSN on TreasuryDirect. Cannot be redeemed for 12 months; early redemption before 5 years forfeits 3 months of interest.
As of 2026, treasury auction results and current rates are published daily at TreasuryDirect.gov. Based on data from treasury.gov, the yield curve shape (normal, flat, or inverted) signals market expectations about future economic growth and Federal Reserve policy.
Tax Advantages of Treasury Securities
Treasury interest income is exempt from state and local income taxes under federal law (31 U.S.C. § 3124). This makes treasuries particularly attractive for investors in high-tax states like California (13.3%), New York (10.9%), and New Jersey (10.75%). A treasury yielding 4.5% in New York effectively equals a 5.06% fully-taxable CD for someone in the 10.9% state bracket.
The tax-equivalent yield formula is: TEY = Treasury Yield / (1 - State Tax Rate). For comparing treasuries against municipal bonds (which are exempt from federal tax), reverse the comparison: Muni TEY = Muni Yield / (1 - Federal Tax Rate). This calculator computes both directions so you can make direct comparisons. Treasury interest is still subject to federal income tax and must be reported on Schedule B of Form 1040 (source: IRS Publication 550). Last updated: May 2026.
Treasury Yields vs Other Safe Investments
When choosing between safe, fixed-income options, after-tax yield is what matters. Here is how treasuries compare:
- High-yield savings accounts (4.0–4.5% APY in 2026): Fully taxable at both federal and state levels. FDIC insured up to $250,000. Liquid but rates fluctuate with Fed policy.
- Certificates of Deposit (CDs) (4.2–4.8% APY): Fully taxable. FDIC insured. Early withdrawal penalties apply. Fixed rate for the term. Higher nominal yield but lower after-tax yield than treasuries in high-tax states.
- Municipal bonds (3.0–4.0% yield): Exempt from federal tax; often exempt from state tax for in-state residents. Lower nominal yield but competitive after-tax yield for high-bracket investors. Credit risk varies by issuer (AAA for general obligation bonds, lower for revenue bonds).
- Treasury securities (4.0–4.7% in 2026): Federal tax only, state-exempt. Zero credit risk. Highly liquid secondary market for notes/bonds. The benchmark against which all other yields are measured.
According to treasurydirect.gov, individual investors purchased over $300 billion in marketable treasury securities in 2025, reflecting strong demand for safe, tax-advantaged yields in the current rate environment.