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Explainer

Treasury bills vs CDs

Treasury bills are short-term U.S. government securities that are exempt from state and local income tax. CDs are FDIC-insured bank deposits with a fixed APY and an early withdrawal penalty. Near-identical yields can come out differently after tax.

By PickedFinance Editorial TeamLast updated Rates checked Nov 10, 2026

Disclosure: links on this page currently go straight to each provider’s own site, and we don’t earn a commission from them. If we join a provider’s affiliate program later, that will never change which products we include or how we order them. How we make money.

How this page was made: it’s built from each provider’s own terms, rate and fee pages and from regulator sources, all listed at the bottom. We haven’t opened these accounts or products to test them, and we don’t give scores. Every rate shows the day we checked it. Our methodology.

Quick answer

Short answer: in early November 2026, recent T-bill auctions yielded 4.16% (13-week) to 4.50% (52-week), and the best bank CDs we found paid 4.20% APY (6-month) to 4.60% (12-month). T-bill interest is free of state and local income tax; CD interest isn’t. In a high-tax state, a T-bill can beat a slightly higher CD.

Last updated Rates checked Nov 10, 2026

T-bill figures below are the “investment rate” from TreasuryDirect’s[1][2][3] auction results feed for the most recent auctions we could see on Nov 10, 2026. The investment rate measures return on the price you pay over a 365-day year, which makes it closer to an APY than the discount rate Treasury also publishes, but it isn’t calculated the same way as an APY, so treat small differences as a wash. CD figures are APYs from the banks’ own pages that day. This is general information, not investment or tax advice.

At a glance

T-bill auction yields vs bank CD APYs (checked Nov 10, 2026)
TermTreasury bill (investment rate)Best CD we found (APY)
About 3 months4.159% investment rate (13-week bill issued Nov 12, 2026; high discount rate 4.060%) as of Nov 10, 2026Synchrony 3-month CD paid 0.25% APY
About 6 months4.293% investment rate (26-week bill issued Nov 12, 2026; high discount rate 4.145%) as of Nov 10, 2026Synchrony: 4.20% APY (6-month) as of Nov 10, 2026
About 12 months4.496% investment rate (52-week bill issued Oct 29, 2026; high discount rate 4.290%) as of Nov 10, 2026Sallie Mae: 4.60% APY (12-month; $2,500 minimum) as of Nov 10, 2026
Synchrony: 4.40% APY (12-month; no minimum) as of Nov 10, 2026

The key differences

  • Backing. CDs at FDIC-insured banks are deposits, insured up to $250,000 per depositor, per bank, per ownership category. The FDIC[7] lists Treasury bills as not covered by deposit insurance; they’re U.S. Treasury securities.
  • Taxes. TreasuryDirect[1][2][3] says T-bill interest has federal tax due but “no state or local taxes.” CD interest is taxable interest under IRS[8] rules, and the state and local exemption TreasuryDirect describes is for Treasury securities; check your state’s rules for CD interest.
  • How you earn. T-bills are sold at a discount (or at par) and pay face value at maturity; the difference is your interest. CDs pay interest on your deposit.
  • Terms. Treasury sells bills maturing in 4, 6, 8, 13, 17, 26 and 52 weeks. Bank CDs typically run 3 months to 5 years or longer.
  • Getting out early. TreasuryDirect says you can hold a bill to maturity or sell it before then, at whatever the market pays at the time. Breaking a CD costs an early withdrawal penalty, from 90 to 540 days of interest at the banks we checked.
  • Minimums. T-bills: $100, in $100 increments, up to $10 million per non-competitive bid at TreasuryDirect. CDs: from $0 (Synchrony, Capital One, Amex) to $2,500 (Sallie Mae).

A simple after-tax comparison

Say you’re in a state with a 6% income tax and compare a 52-week T-bill at a 4.50% investment rate with a 12-month CD at 4.60% APY. Ignoring federal tax, which applies to both, the state takes about 0.28 points of the CD’s yield (4.60% × 6% ≈ 0.28%), leaving about 4.32%. The T-bill keeps all 4.50% for state purposes. In a state with no income tax, the CD’s higher APY would win. This is a simplified illustration; your actual taxes depend on your situation, so check with a tax professional.

How to buy each

T-bills: directly from the Treasury at TreasuryDirect[1][2][3], or through a bank or broker. Auctions run weekly for 4- to 26-week bills and every four weeks for 52-week bills. CDs: open online at the bank and fund it from a linked account; see our CD rate comparison.

Who should skip this

  • Money you need within weeks: keep it in a high-yield savings account; selling a T-bill early can mean a loss, and breaking a CD costs a penalty.
  • Anyone wanting a rate for 2–5 years: T-bills max out at 52 weeks; look at longer CDs or Treasury notes instead.
  • Readers in states with no income tax can mostly compare headline yields; the state-tax advantage of T-bills doesn’t apply.

Frequently asked questions

Are T-bills safer than CDs?
They’re protected differently. CDs at FDIC-insured banks are covered by FDIC[7] insurance up to $250,000 per depositor, per bank, per ownership category. T-bills are U.S. Treasury securities; the FDIC lists them as not covered by deposit insurance.
Do I pay state tax on Treasury bills?
No. TreasuryDirect[1][2][3] says T-bill interest is subject to federal tax but not state or local taxes. CD interest is taxable interest under IRS[8] rules; check your state’s rules too.
What’s the minimum to buy a T-bill?
TreasuryDirect[1][2][3] sells bills in $100 increments with a $100 minimum, up to $10 million per non-competitive bid.
Can I get my money out of a T-bill early?
Yes. TreasuryDirect[1][2][3] says you can sell a bill before it matures; you get the market price at the time, not a guaranteed amount. Breaking a CD early instead costs an early withdrawal penalty set by the bank.
Why does Treasury show two rates for a T-bill?
TreasuryDirect’s[1][2][3] pricing formula applies the discount rate to face value over a 360-day year. The investment rate in the auction results matches the return on the price you pay over a 365-day year: for the 13-week bill issued Nov 12, 2026, (100 − 98.973722) ÷ 98.973722 × 365 ÷ 91 ≈ 4.159%, by our arithmetic. That makes it more comparable to a CD’s APY, so we show it.

Sources

Every source below was opened and read for this page (rates last checked Nov 10, 2026). Providers’ own pages are labeled with the provider’s name; regulator pages are labeled with the agency. Rates and terms change often, so confirm on the provider’s site before you apply.

  1. TreasuryDirect: Treasury Bills (treasurydirect.gov, checked Nov 10, 2026)
  2. TreasuryDirect: Auctioned Treasury bills (results feed) (treasurydirect.gov, checked Nov 10, 2026)
  3. TreasuryDirect: Understanding Pricing and Interest Rates (treasurydirect.gov, checked Nov 10, 2026)
  4. Synchrony Bank: CDs (synchronybank.com, checked Nov 10, 2026)
  5. Sallie Mae: Certificates of Deposit (salliemae.com, checked Nov 10, 2026)
  6. American Express: Certificates of Deposit (americanexpress.com, checked Nov 10, 2026)
  7. FDIC: Understanding Deposit Insurance (fdic.gov, checked Nov 10, 2026)
  8. IRS: Topic no. 403, Interest received (irs.gov, checked Nov 10, 2026)
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Best CD rates

A CD locks an APY for a set term in exchange for a penalty if you withdraw early. On Nov 10, 2026, the best rates we found were 5.00% APY for 5 years and 4.60% for 1 year at Sallie Mae, and 4.20% for 6 months at Synchrony.

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CD vs high-yield savings account

A CD trades access for a fixed rate; a high-yield savings account keeps your money available at a rate that can change any time. On Nov 10, 2026, 12-month CDs paid 0.60 to 1.25 points more than the same banks’ savings accounts.

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FDIC insurance limits, explained

The FDIC limit is $250,000 per depositor, per FDIC-insured bank, for each ownership category. Using more than one category or more than one bank can legally cover far more. Investments such as stocks, funds and crypto aren’t covered at all.