Treasury Bill (T-Bill) Ladder Calculator – State Tax-Free Cash Yield Simulator
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What is a Treasury Bill (T-Bill) Ladder Strategy?
A Treasury Bill Ladder is a cash management strategy where capital is split into multiple tranches invested across short-term US Treasury obligations with staggered maturity dates (e.g. 4-week, 8-week, 13-week, and 26-week bills). As each bill matures, principal and interest automatically roll into a new bill at current market rates, ensuring continuous liquidity alongside competitive risk-free yields.
The Immense State Tax Advantage: T-Bills vs CDs and HYSAs
For investors residing in high-tax states (California, New York, New Jersey, Massachusetts), T-Bills offer a decisive mathematical edge over high-yield savings accounts (HYSA) and bank certificates of deposit (CDs):
- 100% State & Local Tax Exemption: Under federal statute 31 U.S.C. § 3124, US Treasury interest is strictly exempt from state and municipal income taxes.
- Higher After-Tax Equivalent Yield: A 5.10% T-Bill yield for a California resident in the 9.3% bracket is mathematically equivalent to earning 5.62% APY in a fully-taxable bank CD.
- Zero Credit Risk: T-Bills are backed by the full faith and credit of the United States federal government, bypassing FDIC $250,000 per-bank insurance limits.
Frequently asked questions
Where can I buy Treasury Bills without fees?
You can purchase T-Bills with zero fees and zero commissions directly from the US Department of the Treasury at TreasuryDirect.gov, or through major brokerage firms (Charles Schwab, Fidelity, Vanguard).
What is the minimum purchase amount for T-Bills?
T-Bills are sold in increments of $100 par value, making them accessible to any cash balance.
How does T-Bill 'Auto-Roll' work?
When purchasing through a broker or TreasuryDirect, you can check 'Schedule Auto-Roll'. Upon maturity, your original principal automatically purchases the next newly auctioned bill without sitting idle in uninvested cash.
Maximize retirement accounts, high-yield cash reserves, and automated portfolio rebalancing with zero hidden fees.