High-Yield Savings vs Treasury Bills: What $25,000 Earns After Tax in Nov 2026

Michael Whitman · Trading since 2017, full-time since 2020 · YouTube creator, 137K subscribers · Published 2026-11-07

A high-yield savings account is a bank deposit you can tap any day at a rate the bank can change any day; a Treasury bill is a short loan to the US government at a rate fixed for 4 to 52 weeks. Both are about as safe as cash gets.

The choice is a trade between access and yield, and in early November 2026 the yield side of that trade was unusually large. Most comparisons stop at “T-bills are state-tax-free.” This one prices both with rates dated to the day, puts them on the same yearly scale, works out what $25,000 keeps after tax at five state tax rates, and checks 17 years of data for how often an ordinary savings account actually kept up.

What each one is

A high-yield savings account is an ordinary savings deposit that pays far more than the branch average, usually at an online bank with no branches. The rate is variable: it can change the day after you open the account. Deposits are covered by the FDIC, which says deposits are insured to at least $250,000 at each insured bank. How that limit works for joint and trust accounts is on deposit risk.

A Treasury bill is a short-term IOU from the US Treasury. You buy it below face value and get the full face value at maturity; the difference is your interest. TreasuryDirect sells terms of 4, 6, 8, 13, 17, 26 and 52 weeks, from $100 in $100 steps. The full mechanics, including how the auction sets the price, are on Treasury bills rather than repeated here.

Where they differ

The bank’s rate moves whenever it chooses. A savings APY can be cut the week after you deposit. A bill’s yield is fixed the day you buy it, which protects you when rates fall and holds you back when they rise.

Interest arrives differently. Savings interest is credited monthly and compounds. A bill pays nothing until it matures, then pays it all at once, so the yield you see on a bill is not on the same scale as an APY until you convert it.

Why the rates are not quoted the same way

The 13-week bill sold on 2 Nov 2026 shows three different numbers. The discount rate, 4.040%, is the old money-market convention: the discount as a share of face value over a 360-day year. The investment rate, 4.138%, is the return on what you actually paid over a 365-day year, with no compounding. Banks quote an APY, which compounds.

To compare like with like, we converted each bill price to the APY scale: (100 / price) raised to the power of 365 over the days held, minus one. The 13-week bill, priced at $98.978778 per $100 for 91 days, comes out at 4.20%. On the same scale the 4-week bill (auctioned 5 Nov) was 4.03%, the 26-week 4.34% and the 52-week (auctioned 27 Oct) 4.55%. Using the discount rate instead would understate a bill by about a sixth of a point, which is the gap some comparisons quietly lose.

A worked example: $25,000 for one year

Take $25,000 that will not be needed for a year, a 22% federal tax bracket as an example, and the best online APY in our sample, 3.50%. The 52-week bill is 4.547% on the APY scale. Federal tax hits both; state tax hits only the savings interest. (Buying $25,000 of the 52-week bill directly earns $1,133.59 over its 364 days; the table uses the yearly scale so both sides line up.)

Before tax the bill earns $1,136.75 and the savings account $875.00. At the FDIC national average of 0.38% the same $25,000 earns $95.00, and at 0.01% it earns $2.50. We left out the federal deduction for state taxes, which helps only people who itemize, and the chance that the savings rate changes during the year, which can cut either way.

The last column is the useful one. At a 5% state rate, a savings account needs 4.86% to tie the bill, and no account in our sample was within a point of that.

The shorter the horizon, the smaller the dollars. A $10,000 13-week bill cost $9,897.88 at the 2 Nov auction and pays $102.12 at maturity; the same $9,897.88 at 3.50% earns about $85.26 over those 91 days. That $17 is real but small, and it buys a 13-week lock.

The original data

What today’s rates say. On the APY scale the four online savings accounts paid 73.8% to 83.3% of the 13-week bill’s 4.20%. The FDIC’s national average savings rate, 0.38% in its October 2026 table (as of 19 Oct), was 9.0% of it. And five of the largest branch banks paid 0.01% to 0.04%, as listed by Ally on 3 Nov 2026 (the comparison table on its savings page, data from mybanktracker.com, California, $5,000 balance; online banks C and D come from the same table). “Savings account” covers products so far apart that the best online rate was more than 75 times the best branch-bank rate.

What 17 years say. We set the Federal Reserve’s monthly 3-month bill rate (FRED TB3MS, converted to the investment-rate basis) against the FDIC national average savings rate for every month from Jun 2009 to Oct 2026, 209 months. The FDIC changed its averaging method in April 2021, so the series joins two methods at that point.

• Savings was ahead in 76 months, every one of them between Jun 2009 and Nov 2021, when bills paid close to zero and banks still paid a little.
• The bill’s best month was Oct 2023 at 5.49%, when the national savings average was 0.46%. The savings average peaked at 0.47%, first reached in Jan 2024. In Oct 2026 the bill was at 4.15%.
• Since Jan 2022, 58 months, the bill averaged 4.08% and national savings 0.35%.
• On $10,000 from Jun 2009, rolling 3-month bills (compounded monthly at each month’s rate) grew to about $12,958 by Oct 2026; the average savings account grew to about $10,289. From Jan 2022 alone it was about $12,173 against $10,173.

Prices rose 3.72% in the 12 months to Sep 2026 (CPI, FRED CPIAUCSL), so after federal and state tax neither option did much better than hold value, and the national average lost ground.

There is no official series for high-yield savings rates, so the history compares bills with the average account, not the best one. Treat it as the floor of the comparison and today’s snapshot as the realistic one.

Download the data: bill yield vs national savings rate by month, after-tax interest on $25,000 by state rate and every dated yield on this page. All three are free to reuse with a credit and a link back, under the site license.

Getting your money out

Savings: whenever you ask. The Federal Reserve deleted the six-per-month limit on savings transfers from Regulation D on 24 Apr 2020. Some banks still set their own limits, so read the account terms.

T-bills: wait, or sell. TreasuryDirect says a security bought there must be held for 45 days before it can be sold or transferred, which means a 4-week bill bought there cannot be sold at all. Selling also means going through a bank, broker or dealer. A bill sold early returns its market price that day, which may be less than you planned if rates have risen. Bills already held at a broker are sold through that broker.

Before you open a high-yield savings account

Five checks matter more than a tenth of a point of APY:

1. Confirm the bank is FDIC-insured under its legal name, not a brand or app name.
2. Read the balance tiers. Some accounts pay the headline APY only above or below a balance.
3. Look for a promo rate that resets after a few months.
4. Check transfer limits and timing to and from your checking account.
5. Note today’s rate and date. If it falls far behind the 13-week bill later, that gap is your signal to move the part you will not need soon.

Which one to use

Use the high-yield savings account when the money might be needed on any given day. An emergency fund is the plain case: the job loss or car repair will not wait for a maturity date. The emergency fund page covers how big it should be.

Use T-bills when you know you will not touch the money for at least a few weeks, such as a tax bill due in April or a down payment next year. On Nov 2026 rates the bill also wins on yield at every state tax rate in our table, and the gap grows with your state rate.

Use both when the amount is large. One way to split it is a month or two of spending in savings and the rest in a ladder of 4- to 26-week bills, so something matures every few weeks. A money market fund holding Treasuries sits between the two: daily access, a yield close to bills, no FDIC insurance.

When it fails

Savings fails when the bank quietly lowers the rate. A variable APY that started near the bill rate can drift down while you are not looking; the national average sat below 0.5% for all 209 months in our data.

T-bills fail when you need the money early. The 45-day hold in TreasuryDirect and the need to sell through a broker turn “safe” into “inconvenient” exactly when you are under pressure.

T-bills also fail when rates keep rising. A 52-week bill bought at 4.496% keeps paying that even if new bills pay more, which is the trade-off covered on certificates of deposit.

Both fail against inflation after tax. With prices up 3.72% over the 12 months to Sep 2026, a 4.55% bill taxed at 22% keeps about 3.55%. The gap is explained on inflation and savings.

Questions people ask

Are T-bills safer than a high-yield savings account?

Both are about as safe as cash gets. Savings is protected by FDIC insurance up to the limit at each bank; a bill is a direct obligation of the US Treasury with no dollar limit. The practical risk is access, not loss.

Do I pay tax on T-bill interest?

Yes, federal income tax. TreasuryDirect says there is no state or local income tax on it. Savings interest is taxed by both.

Is a T-bill or a high-yield savings account better for an emergency fund?

Savings, for the part you may need at short notice. A bill cannot be cashed before maturity without selling it through a broker.

What is the minimum to buy a T-bill?

$100 at TreasuryDirect, in steps of $100.

Related

The mechanics of buying a bill, every term’s latest price and a 1980s-to-today roll are on Treasury bills. For daily access at close to bill yields, compare money market funds, and for a fixed rate at a bank, see certificates of deposit. How much to keep within reach is on the emergency fund page, and what inflation does to all of it is on inflation and savings.

This page is educational, not financial advice. Test every idea on your own charts before risking money.