Treasury Bill Yield Calculator
Work out a T-bill’s discount yield, bond-equivalent (investment) yield, money-market yield and effective annual yield from its price — or its price from the discount rate or investment rate — for 4, 6, 8, 13, 17, 26 and 52-week bills, with the Treasury formula for bills over six months, maturity date, after-tax and tax-equivalent yield.
How it works
Discount yield d = (F − P) ÷ F × 360 ÷ t · Price P = F × (1 − d × t ÷ 360) · Investment rate (t ≤ ½ year) = (F − P) ÷ P × y ÷ t, y = 365 or 366 · Investment rate (t > ½ year) = [−2t/y + 2√((t/y)² − (2t/y − 1)(1 − F/P))] ÷ (2t/y − 1) · Money-market yield = (F − P) ÷ P × 360 ÷ t · Effective annual yield = (F ÷ P)^(365/t) − 1
Treasury bills pay no coupon — you buy them below face value and are repaid the full face at maturity, and that gap is your return. Bills are sold in 4, 6, 8, 13, 17, 26 and 52-week terms. The discount yield (or discount rate) is how bills are quoted and auctioned: the discount measured against face value on a 360-day year, which understates the true return. The investment rate — Treasury’s name for the bond-equivalent or coupon-equivalent yield — measures the gain against what you actually paid on a 365-day year (366 in a leap year), so it can be compared with Treasury notes, bonds and savings rates. For bills with more than half a year to run, Treasury uses a quadratic formula that treats the bill like a semiannual coupon bond. Enter the price you paid, or the discount rate or investment rate from an auction result, and pick a standard term or type the days left for a bill bought on the secondary market. The calculator also gives the money-market (CD-equivalent) yield used for commercial paper and CDs, the effective annual yield that matches an APY, the holding-period return, the price per $100 and the maturity date. Under More options you can add your federal and state tax rates: T-bill interest is exempt from state and local income tax, so the tax-equivalent yield shows what a fully taxable CD would have to pay to match it. A table shows every standard term at the same discount rate.
Worked example
A $1,000 bill bought for $985 with 91 days to maturity returns $15. The discount yield is 15 ÷ 1,000 × 360 ÷ 91 ≈ 5.934%. The investment rate is 15 ÷ 985 × 365 ÷ 91 ≈ 6.108% — higher, because it measures the gain against the $985 actually invested over a 365-day year. The money-market yield is 15 ÷ 985 × 360 ÷ 91 ≈ 6.025%, and compounding four such bills in a row gives an effective annual yield of (1,000 ÷ 985)^(365 ÷ 91) − 1 ≈ 6.250%. A 52-week bill bought at a 4% discount rate costs $959.56 per $1,000 and has an investment rate of about 4.18% (not the 4.23% the simple formula gives) using Treasury’s long-bill formula.
Sources: Treasury Bills — TreasuryDirect · 31 CFR Part 356, Appendix B — formulas for bills
Frequently asked questions
Why are there different yields?
The discount yield is a market convention that measures the return against face value on a 360-day year, which is how bills are quoted. The investment rate (bond-equivalent yield) measures against the price you paid on a 365-day year. The money-market yield uses the price but a 360-day year, like CDs and commercial paper, and the effective annual yield adds compounding so it lines up with an APY.
Which yield should I use to compare with a savings account?
The effective annual yield, because savings accounts and CDs quote an APY that includes compounding. To compare with a Treasury note or bond, use the investment rate. If you pay state income tax, also look at the tax-equivalent yield: T-bill interest is exempt from state and local tax.
How do I find the price from the discount rate?
Price = face × (1 − discount rate × days ÷ 360). A 13-week bill at a 4% discount rate costs 1,000 × (1 − 0.04 × 91 ÷ 360) = $989.89 per $1,000 of face value. Choose “Discount rate” and the calculator does this for you.
Why is the formula different for 52-week bills?
For bills longer than half a year, Treasury computes the investment rate as if the bill were a coupon bond paying interest twice a year, so that it is comparable with notes and bonds. That leads to a quadratic formula; the simple 365 ÷ days version slightly overstates the yield for a 52-week bill.
Do T-bills pay interest along the way?
No. They are zero-coupon: you pay less than face value up front and receive the full face amount at maturity. The entire return is the difference between what you paid and what you are repaid, reported as interest in the year the bill matures.
Related calculators
Educational estimate, not investment, tax or financial advice. Returns are never guaranteed and past performance does not predict the future. Confirm figures with a licensed advisor.