Calculator
I Bond vs HYSA vs CD/T-Bill
An I bond, a high-yield savings account, and a CD or T-bill are taxed differently, locked up differently, and none of them compound the way their advertised rate suggests. This runs Treasury's actual composite-rate formula for the I bond, holds the HYSA's floating rate constant as the most favorable assumption to that leg, and models a CD or T-bill's term and early-withdrawal penalty — then reduces all three to one after-tax figure at the horizon you set.
Results
Fill in your numbers below, then press Calculate to compare the three.
Amount and horizon
Every leg starts with the same amount on the same day and is valued at the same horizon— that's what makes the three comparable at all.
Time horizon
Your marginal tax rates
Enter the rate you'd pay on one more dollar of interest income, not your average rate. The tax bracket headroom calculator finds this precisely.
State and local: use 0% if you live in a state with no income tax.
Series I savings bond
Treasury sets a new composite rate every six months: your fixed rate, locked in for the life of the bond, plus twice the current semiannual inflation rate it publishes — not an annualized figure.
Unreachable for the first 12 months. Redeemed before 5 years, the most recent 3 months of interest are forfeited.
High-yield savings account
A real HYSA's APY floats — it can change at any time. This tool holds it constant for the whole horizon, which is the most favorable assumption possible to this leg, not a forecast.
Fully liquid, no penalty
CD or T-Bill
A CD's interest is fully taxable and breaks its rate with a penalty if you leave before the term is up. A T-Bill's interest is state-and-local-tax-exempt and carries no stated early-withdrawal penalty — but selling one early on the secondary market carries price risk, which this tool doesn't model.
If the term is shorter than your horizon, it's assumed to roll over into a new one at the same rate.
Months of interest forfeited, only if the term runs past your horizon
For educational purposes only. Results are estimates and do not constitute financial, tax, or legal advice. Consult a qualified professional before making any financial decisions.
How to use it
Start with the amount and the horizon — how long you can actually leave the money alone. Every leg is valued at that same horizon, which is what makes the three comparable at all.
Enter your own marginal tax rates, federal and state. I bonds and T-bills are exempt from state and local tax; HYSA and CD interest is fully taxable — that difference alone can flip the ranking.
The I bond's fixed rate and current semiannual inflation rate are both published by TreasuryDirect. Enter them directly — the tool runs Treasury's own composite-rate formula rather than asking you to.
Toggle CD against T-Bill to see how the state-tax exemption and the early-withdrawal penalty each change.
Why liquidity is shown, not just return
A rate alone doesn't say whether the money is actually there when you need it. An I bond redeemed before 12 months isn't available at all — this tool reports that plainly rather than printing a number nobody can get at.
Redeemed between 12 and 60 months, an I bond forfeits its most recent 3 months of interest — computed as the real difference between the balance at the horizon and the balance 3 months earlier, not a flat estimate.
A CD held past its term rolls the whole balance into a fresh one at the same rate; redeemed before its term is up, it forfeits the stated penalty. A T-bill has no such stated penalty, but selling one early on the secondary market carries price risk this tool doesn't model — it assumes an early sale returns the bill's full accrued value, at par.
What “after-tax effective rate” means
The three legs compound on different schedules — semiannually for an I bond, monthly for the other two — over whatever horizon you set. Comparing their raw ending balances only works when the horizon happens to line up with how they compound.
So each leg's after-tax ending value is also restated as a rate: what constant annual return, compounded once a year, would have produced the same after-tax result. That figure is what belongs beside a HYSA's advertised APY or a CD's quoted rate — an apples-to-apples number, not a raw dollar total.
Assumptions
- The I bond composite rate is Treasury's own formula: fixed rate plus twice the semiannual inflation rate, plus their product, compounding semiannually at half that rate each period.
- The HYSA's APY is held constant for the entire horizon — the most favorable assumption possible to that leg, since a real HYSA rate floats with the market.
- A CD or T-bill whose term is shorter than the horizon is assumed to roll over into a new one at the same rate, without modeling the exact rollover date.
- Every figure is a marginal-rate estimate, not a full return: it doesn't model AMT, the net investment income tax, or how the interest interacts with the rest of your return.
- Not modeled: I bond purchase limits, promotional or tiered HYSA rates, a CD's rate at renewal, or brokerage fees on a T-bill purchase.