Treasury Bond Calculator

Q: How do I-Bonds work and what are the current rates?

I-Bonds are inflation-protected savings bonds with a fixed rate (locked at purchase for 30 years) and a semiannual inflation rate (resets every May and November based on CPI-U). The composite rate formula is: fixed + (2 x inflation) + (fixed x 2 x inflation). Current fixed rate is 1.20%, semiannual inflation ~1.40%, giving a composite rate of about 4.03%. Limit: $10,000 electronic + $5,000 paper per SSN/year.

Q: T-Bills vs I-Bonds: which should I buy?

T-Bills are better for short-term cash management (4-52 weeks), have no purchase limits, and are highly liquid. I-Bonds are better for long-term inflation protection but have a 1-year lock, $10K annual limit, and a 3-month interest penalty before 5 years. Many investors use both: T-Bills for cash reserves and I-Bonds for long-term purchasing power protection.

Calculate T-Bill, T-Note, and T-Bond returns, project I-Bond value with inflation protection, and build a Treasury ladder for steady income. See the state tax advantage of Treasury interest over CDs and savings accounts.

Calculate returns on US Treasury securities and compare to HYSA

Investment amount

Minimum $100 at TreasuryDirect

Treasury type

Yield auto-fills based on type

Current yield (annual)

Override the default yield if needed

Hold to maturity?

Selling early exposes you to interest rate risk

State income tax rate

CA: 9.3%, NY: 6.85%, TX/FL: 0%

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How to Use This Calculator

Treasury Returns tab

The default tab. Select a treasury type (T-Bill, T-Note, or T-Bond) and the yield auto-fills from current approximate rates. Enter your investment amount and see total interest earned, annualized return, monthly interest income, and a side-by-side comparison with a high-yield savings account at 4.5%. Expand "More options" to adjust for hold-to-maturity preference and your state tax rate to see the effective yield boost from the state/local tax exemption.

I-Bond Calculator tab

Enter your purchase amount ($25–$10,000 electronic per year), the current fixed rate and semiannual inflation rate. The calculator projects your I-Bond value at each 6-month interval using the composite rate formula, shows the 3-month interest penalty if redeemed before 5 years, and compares total returns against a 52-week T-Bill. Adjust the holding period from 1 to 30 years.

Treasury Ladder tab

Enter a total investment amount and choose a ladder strategy: T-Bill rolling (4/13/26/52-week), T-Note (2/5-year), or mixed. The calculator splits your money equally across rungs, shows maturity dates, weighted average yield, monthly cash flow, annual interest income, and a 5-year projection with or without reinvestment. See how much you save in state taxes compared to a taxable CD at the same rate.

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The Formulas

I-Bond composite rate

Composite Rate = Fixed Rate + (2 × Semiannual Inflation Rate) + (Fixed Rate × 2 × Semiannual Inflation Rate)

Example: 1.20% + (2 × 1.40%) + (1.20% × 2 × 1.40%) = 4.03%

Semiannual Accrual = Principal × (Composite Rate / 2)
Interest compounds every 6 months

The fixed rate is locked at purchase for the bond’s 30-year life. The inflation component resets every May and November based on CPI-U changes.

Treasury yield and tax advantage

T-Bill Interest = Face Value × Annual Yield × (Days to Maturity / 365)
T-Note/T-Bond Coupon = Face Value × Annual Yield / 2 (paid semiannually)

Tax-Equivalent Yield = Treasury Yield / (1 − State Tax Rate)
State Tax Saved = Interest Earned × State Tax Rate

All U.S. Treasury interest (T-Bills, T-Notes, T-Bonds, I-Bonds, TIPS) is exempt from state and local income tax. This makes the effective yield higher than a CD or savings account paying the same nominal rate, especially in high-tax states like California (9.3%), New York (6.85%), and New Jersey (10.75%).

Example

Maria — building a $50K T-Bill ladder in California

Maria has $50,000 in cash earning 4.5% in a HYSA. California state tax: 9.3%. She wants to build a T-Bill ladder for better after-tax returns while maintaining regular liquidity.

Treasury Returns tab

Investment$50,000

T-Bill 13-week @ 4.30%$537.50 interest

HYSA interest (same period)$562.50

State tax saved on T-Bill$49.99

Tax-equivalent yield4.74%

Even though the T-Bill nominal yield is lower than the HYSA, the state tax exemption gives Maria an effective yield of 4.74% — beating the HYSA after California taxes.

Treasury Ladder tab

Total investment$50,000

StrategyT-Bill Rolling (4 rungs)

Per rung$12,500

Weighted average yield4.21%

Annual interest$2,106.25

Annual state tax saved$195.88

5-year compounded value$61,510

With the ladder, Maria always has a T-Bill maturing within weeks. She reinvests each maturing rung into the longest maturity to keep the ladder rolling. Over 5 years with reinvestment, she earns over $11,500 in interest and saves nearly $1,000 in California state taxes vs a taxable CD.

FAQ

How do I buy Treasury securities on TreasuryDirect? ▼

Create a free account at TreasuryDirect.gov, link your bank account, and place an order. For T-Bills, you can schedule purchases at upcoming auctions (held weekly for most maturities). For I-Bonds, purchases are instant at face value. Minimum purchase is $100 for T-Bills/Notes/Bonds and $25 for I-Bonds. You can also buy T-Bills through brokerages like Fidelity, Schwab, and Vanguard at auction or on the secondary market.

How do I-Bonds work and what are the current rates? ▼

I-Bonds are inflation-protected savings bonds with two rate components: a fixed rate (locked at purchase for 30 years) and a semiannual inflation rate (resets every May and November based on CPI-U). The composite rate formula is: fixed + (2 × inflation) + (fixed × 2 × inflation). As of 2026, the fixed rate is 1.20% and the semiannual inflation rate is approximately 1.40%, giving a composite rate of about 4.03%. Purchase limit: $10,000 electronic + $5,000 paper per SSN per year.

Are Treasury securities exempt from state and local tax (SALT)? ▼

Yes. All interest from U.S. Treasury securities — T-Bills, T-Notes, T-Bonds, I-Bonds, and TIPS — is exempt from state and local income tax. You still owe federal income tax on the interest. This makes Treasuries especially attractive in high-tax states. For example, a 4.30% T-Bill in California (9.3% state tax) has a tax-equivalent yield of about 4.74%. In New York City (combined ~12%), the equivalent yield is about 4.89%.

What is a Treasury ladder strategy? ▼

A Treasury ladder spreads your investment across securities with different maturities. As each one matures, you reinvest the proceeds into a new security at the longest rung of your ladder. This provides three benefits: (1) regular liquidity as portions mature frequently, (2) reduced reinvestment risk since only one rung is affected by rate changes at a time, and (3) a blended yield across the maturity spectrum. A common approach is a 4-rung T-Bill ladder (4/13/26/52-week) for cash management or a 5-rung T-Note ladder (1-5 year) for income.

T-Bills vs I-Bonds: which should I buy? ▼

It depends on your goals. T-Bills are better for short-term cash management (4–52 weeks), have no purchase limits, and are highly liquid after maturity. I-Bonds are better for long-term inflation protection, especially when the fixed rate is attractive (currently 1.20%), but come with a 1-year lock (cannot redeem at all), a $10K annual limit, and a 3-month interest penalty if redeemed before 5 years. Many investors use both: T-Bills for their cash reserve ladder and I-Bonds for long-term purchasing power protection.

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