About the Treasury Bill Calculator
This T-bill calculator works out what you pay for a US Treasury bill and what you really earn. Treasury bills are sold at a discount to face value and pay no coupon: you pay, say, $9,798 today and receive $10,000 at maturity. Enter the face amount, the term (4 to 52 weeks) and either the discount rate from an auction result or quote, or the price per $100, and the calculator returns the purchase price, the interest (discount) you earn and the yield.
It is for savers comparing T-bills with high-yield savings, CDs and money market funds, and for anyone reading TreasuryDirect auction results. The quoted discount rate understates your return because it is based on face value and a 360-day year; the investment rate — also called the coupon-equivalent or bond-equivalent yield — is the number to compare with an APY.
Calculations follow the Treasury's published formulas, including the special quadratic formula used for 52-week bills, with a 365-day year by default (Treasury uses 366 when the year after issue contains 29 February). T-bill interest is subject to federal income tax but exempt from state and local income tax.
With the default inputs, the purchase price is $9,797.78. Change any value above to recalculate instantly.
How to use the treasury bill calculator
- 1Enter the face value you want to buy — the amount you get back at maturity.
- 2Choose the bill term, from 4 weeks to 52 weeks.
- 3Enter the discount rate from an auction result or quote, or switch to price per $100.
- 4Read the purchase price and the interest you will earn.
- 5Compare the investment rate or effective yield with savings, CD and money market rates.
Formula and method
T-bills are quoted on a bank-discount basis: the discount rate d is the discount as a share of face value, annualised over a 360-day year. The price per $100 follows directly from d and the number of days t to maturity, and the purchase price is that price times face value ÷ 100.
The investment rate (coupon-equivalent yield) instead measures the return on the money you actually invest, annualised over a 365- or 366-day year, so it is always higher than the discount rate. For bills longer than half a year, Treasury assumes a hypothetical semiannual coupon and solves a quadratic equation for i, which this calculator reproduces. The effective annual yield compounds the bill's return as if rolled over at the same rate all year, which is comparable to an APY.
- P
- Price per $100 of face value
- d
- Discount rate (decimal)
- t
- Days to maturity
- y
- Days in the year (365 or 366)
- i
- Investment rate (bond-equivalent yield)
Worked examples
$10,000 26-week bill at a 4.00% discount rate
Price per $100 = 100 × (1 − 0.04 × 182/360) = 97.977778, so $10,000 face costs $9,797.78 and earns $202.22 at maturity. On the money you actually invest, over a 365-day year, that is a 4.139% investment rate — higher than the 4% discount rate.
$1,000 4-week bill at 4.20%
A 28-day bill at a 4.20% discount costs $996.73 per $1,000 and pays $3.27 of interest in four weeks. Annualised on the price paid, the investment rate is 4.272%.
$10,000 52-week bill at 3.80%
At a 3.80% discount for 364 days the price is 96.157778 per $100, or $9,615.78. Because the term is over half a year, Treasury's quadratic formula gives an investment rate of about 3.968%.
Price known: 13-week bill at 99.00
Buying $5,000 face at 99.00 costs $4,950 and pays $50 in 91 days. That price corresponds to a 3.956% discount rate and a 4.052% investment rate.
Frequently asked questions
How do Treasury bills pay interest?+
T-bills do not pay a coupon. You buy them for less than face value and receive the full face value at maturity; the difference is your interest. For example, paying $9,797.78 for a $10,000 26-week bill earns $202.22.
What is the difference between the discount rate and the investment rate?+
The discount rate divides the discount by face value and uses a 360-day year. The investment rate divides it by the price you paid and uses a 365-day year, so it is always higher and is the better figure to compare with savings account APYs.
Are T-bills taxed?+
Interest on Treasury bills is subject to federal income tax but exempt from state and local income taxes. It is taxed in the year the bill matures or is sold, and reported on Form 1099-INT.
How do I buy Treasury bills?+
You can bid non-competitively at auction through TreasuryDirect (minimum $100) or buy through most brokerages, either at auction or on the secondary market. Non-competitive bids accept the rate set at the auction.
What terms are T-bills available in?+
Treasury currently auctions bills with 4, 6, 8, 13, 17, 26 and 52-week maturities. Four- to 26-week bills are auctioned weekly and 52-week bills every four weeks, and Treasury also issues cash management bills with irregular terms.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.