T-bill vs. CD after tax
Break-even CD APYs under explicit tax scenarios, compared with fresh nationwide quotes.
How much more must a CD pay to match a Treasury after tax?
TreasuryDirect states that Treasury bill interest is subject to federal tax and exempt from state and local income tax. For a taxable CD comparison, we apply both federal and state tax to interest.
The scenarios below use a 22% federal rate and illustrative state rates of 0%, 5% and 10%. They are not statutory brackets for California, New York, New Jersey or Massachusetts. Residents of those states can enter their own marginal rates in the calculator.
| Term | Illustrative state tax | Treasury APY-equivalent | Break-even CD APY | Nationwide quotes above break-even |
|---|---|---|---|---|
| 6 months | 0% | 4.35% | 4.346% | 1Popular Direct: 4.35% · Oct 24, 2026 snapshot |
| 6 months | 5% | 4.35% | 4.647% | 0 |
| 6 months | 10% | 4.35% | 4.993% | 0 |
| 1 year | 0% | 4.49% | 4.489% | 3Popular Direct: 4.60% · Oct 24, 2026 snapshotCIBC Bank USA (CIBC Agility): 4.50% · Oct 24, 2026 snapshotSallie Mae Bank: 4.50% · Oct 24, 2026 snapshot |
| 1 year | 5% | 4.49% | 4.796% | 0 |
| 1 year | 10% | 4.49% | 5.149% | 0 |
Treasury inputs are par-curve APY-equivalents, not executable bill auction prices; the six-month term is approximate. The reference deposit is $10,000; CD quotes are exact-term, non-relationship offers with known applicable tiers and nationwide metadata. Membership and product conditions may apply. A Treasury observation older than seven days is withheld.
The calculation
For holding period h in years, Treasury APY y, federal rate f and state rate s (all rates as decimals):
Break-even CD APY = [1 + ((1 + y)^h − 1) × (1 − f) / (1 − f − s)]^(1/h) − 1
This compares interest over the same holding period, then annualizes the result. It assumes tax is paid from interest at maturity and excludes local taxes, deductions, fees and interactions between taxes.
Sources, scope and methodology
All findings are generated from verified D1 records using fixed calculations and templates. No language model writes these findings. Stale and future-dated quotes are excluded, as are relationship-only quotes. A regulator ID counts once in each institution-level comparison. This tracked sample is not a deposit-weighted national average.
Index comparisons use the highest applicable $10,000 quote at each exact term per regulator. A median or P90 requires at least 30 independent institutions in its group. Fresh regional and promotional offers can be included; availability and membership conditions still apply. ZIP comparisons instead match a stated product, term and tier.
Routine re-verification does not change the financial-content modification date. Tables can change as rates, coverage or freshness change. Download index data and source snapshots · Download current rate quotes · Full methodology · Corrections
Cite APY Ledger, “T-bill vs. CD after tax,” facts changed 2026-10-24, https://apyledger.com/guides/t-bill-vs-cd-after-tax. Data: CC BY 4.0.