Treasury Yield Calculator
Compute the Bond Equivalent Yield (BEY), Bank Discount Yield (BDY), and effective return on US Treasury bills, notes, and zero-coupon government debt.
Total interest earned: $240.00 cash profit across 182 days.
Treasury Yield Calculator - T-Bill Discount Yield & Bond Equivalent Yield (BEY): Compute Bond Equivalent Yield (BEY), Bank Discount Yield (BDY), and effective return on US Treasury bills. Free, private, and simple to use in your browser.
How to Use the Treasury Yield Calculator
Enter Par & Purchase Price
Input the T-Bill face maturity value (e.g. $10,000) and the discounted auction purchase price.
Select Maturity Term
Choose a standard Treasury maturity duration (4, 8, 13, 26, or 52 weeks) or input custom days.
Compare Yield Conventions
Observe the difference between the quoted Bank Discount Yield and the higher true Investment Yield.
Verify Annualized APY
Review the Effective Annual Yield (EAY) to compare Treasury returns directly against bank CDs.
Financial Planning Guide: Understanding T-Bill Yields: Bank Discount Yield vs Bond Equivalent Yield
United States Treasury Bills (T-Bills) are short-term government debt obligations backed by the full faith and credit of the US government, issued with maturities ranging from 4 weeks to 52 weeks. Like zero-coupon bonds, T-Bills pay no regular coupon checks; they are sold at a discount to their par value and mature at full face value ($100, $1,000, or $10,000 multiples).
However, comparing T-Bill quotes to bank Certificates of Deposit (CDs) or corporate bonds can be confusing due to historical fixed-income quoting conventions. In secondary markets, T-Bills are quoted using the Bank Discount Yield (BDY):
BDY = (Discount / Par Value) × (360 / Days to Maturity)
The Bank Discount Yield systematically understates your actual investment return because it divides your profit by the larger par value (rather than what you actually paid) and assumes a 360-day year rather than a 365-day calendar year. To compare a T-Bill fairly against coupon-paying Treasury notes or bank CDs, you must calculate the Bond Equivalent Yield (BEY), also known as the Investment Yield:
BEY = (Discount / Purchase Price) × (365 / Days to Maturity)
Furthermore, interest earned on all US Treasuries is 100% exempt from state and local income taxes, providing a significant after-tax yield advantage over corporate bonds and bank CDs for investors living in high-tax states.
Key Benefits & Features
Four Simultaneous Yield Metrics
Computes BEY (Investment Yield), BDY (Bank Discount), MMY (Money Market), and EAY (Compounded APY).
Standard Auction Presets
Includes quick presets for 4-week, 8-week, 13-week, 26-week, and 52-week Treasury Bill auctions.
Discount Profit Isolation
Displays exact dollar profit realized between initial discount purchase price and maturity payout.
CD & Corporate Normalization
Standardizes non-annualized discount instruments for accurate comparison with bank deposits.
State Tax Exemption Note
Highlights the powerful state and local tax exemption unique to US sovereign debt obligations.
100% Client-Side Privacy
Zero financial tracking, account data storage, or external API requirements.
Why is Bond Equivalent Yield (BEY) higher than Bank Discount Yield (BDY)?
BEY is higher because it divides your profit by your actual purchase price (a smaller denominator than par) and scales it across a true 365-day year instead of an artificial 360-day commercial banking year.
Are Treasury Bill earnings subject to state income tax?
No! All interest earned on US Treasury bills, notes, and bonds is 100% exempt from state and local income taxes, though it is subject to federal income tax.
What is the minimum investment in US Treasuries?
Through TreasuryDirect.gov or major retail brokerage firms, the minimum purchase amount for a US Treasury Bill is only $100.
Can I sell a T-Bill before it matures?
Yes. If you buy a T-Bill through a standard brokerage account, you can sell it on the secondary market prior to maturity at prevailing market prices.
What is the difference between a T-Bill, T-Note, and T-Bond?
T-Bills have maturities of 1 year or less and pay no coupons (discounted). T-Notes have maturities from 2 to 10 years and pay semi-annual coupons. T-Bonds have maturities of 20 or 30 years and pay semi-annual coupons.
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Frequently Asked Questions
Yes, Treasury Yield Calculator – T-Bill Discount Yield & Bond Equivalent Yield (BEY) is 100% completely free to use online with no hidden subscription fees, accounts, or software installation required.
Absolutely. All processing occurs securely within your web browser. Your inputs, calculations, and files are never stored, logged, or uploaded to external servers.
Yes. Treasury Yield Calculator – T-Bill Discount Yield & Bond Equivalent Yield (BEY) is fully responsive and optimized for seamless use across smartphones, tablets, laptops, and desktop computers.
No plugins, extensions, or downloads are required. Treasury Yield Calculator – T-Bill Discount Yield & Bond Equivalent Yield (BEY) operates directly in any standard, modern web browser.