United States Treasury Bill Yield Calculator

United States Treasury bills, or T-bills, are often viewed as some of the safest and simplest investments available. Backed by the United States Department of the Treasury, they are widely used by individuals and institutions to store cash and earn modest returns.

However, while T-bills may look simple on the surface, comparing their true returns is not always easy. Different market conventions, settlement dates, and maturity lengths can significantly affect how yields are calculated.

Use the calculator below to compute days until maturity, discount rate, holding period return, holding period yield (HPY), and coupon equivalent yield (CEY) for U.S. Treasury bills.

Enter the settlement date, maturity date, and purchase price to see how timing and conventions affect your results.

The Hidden Complexity of Treasury Bills

Unlike traditional bonds, T-bills do not pay regular interest. Instead, they are sold at a discount and mature at face value. Your profit comes from the difference between the purchase price and the amount you receive at maturity.

In practice, several factors influence your actual return:

The exact number of days until maturity.
The settlement date.
The day-count convention used.
The method used to annualize returns.
The length of the investment term.

Because of these variables, two similar-looking T-bills can produce different returns. Quoted yields often assume you understand these details, which can lead to confusion.

The Two Coupon Equivalent Yield Formulas

One of the most important details in T-bill analysis is that coupon equivalent yield is calculated differently depending on a bill’s maturity.

The formula changes at 182 days (six months). This calculator follows the formulas published by TreasuryDirect in its Price, Yield and Rate Calculations for a Treasury Bill guide.

For Short-Term T-Bills (182 Days or Less)

For bills with maturities of six months or less, the coupon equivalent yield is calculated as:

\text{CEY} = \frac{\text{Face Value}-\text{Purchase Price}}{\text{Purchase Price}} \times \frac{\text{Days in Year}}{\text{Days to Maturity}}

This formula:

Uses simple interest.
Annualizes the return.
Assumes no compounding.
Is appropriate for very short-term investments.

It is designed to reflect how short-term money market instruments behave.

For Long-Term T-Bills (More Than 182 Days)

For bills with maturities longer than six months, the formula changes to:

\begin{aligned} \text{CEY} &= \frac{-b + \sqrt{b^2 - 4ac}}{2a} \\[2em] b &= \frac{\text{Days to Maturity}}{\text{Days in Year}} \\[2em] a &= \frac{\text{Days to Maturity}}{2\,(\text{Days in Year})} - 0.25 \\[2em] c &= \frac{\text{Purchase Price} - 100}{\text{Purchase Price}} \end{aligned}

This formula:

Accounts for compounding.
Reflects longer holding periods.
Produces a more accurate annualized yield.
Is closer to how bonds are evaluated.

Because longer-term bills behave more like traditional fixed-income investments, this approach provides a better comparison.

Why These Formulas Matter

Using the wrong formula can significantly distort your results.

If you apply the short-term formula to a long-term bill, you may underestimate its true yield. If you apply the long-term formula to a very short bill, you may overstate it.

This calculator automatically selects the correct formula based on the number of days to maturity. You do not need to determine which one applies. The tool handles it for you.

NOTE: When calculating CEY, selecting “Actual Days in Year” determines the year length based on the T-bill’s issue date. The calculator adds one full year to the issue date and counts the actual number of days in that period, including leap days if applicable. If this option is not selected, the calculation assumes a fixed year length of 360 or 365 days, based on your selection.

What This Calculator Does

This tool brings all major T-bill calculations into one place. It automatically computes:

Days to Maturity: The number of days from settlement to maturity.
Discount Rate: Calculated using the standard 360-day year convention.
Holding Period Return: The actual return earned over the life of the bill.
Holding Period Yield: The total non-annualized percentage return.
Annualized Yield: The annualized percentage return.
Coupon Equivalent Yield: A standardized measure for comparison with coupon-paying bonds.

By presenting these values together, the calculator helps you understand how each factor contributes to your overall return.

Disclaimer

This calculator is provided for informational and educational purposes only. While standard market formulas are used, there is no guarantee that the results are accurate, complete, or suitable for any specific purpose.

Nothing in this article should be considered investment advice. Always consult a qualified financial professional before making financial decisions

Treasury Bill Yield Calculator

Quantity (each equals 100.00 US$ Face Value): Principal Amount US$:

Days in Year:

360 Days 365 Days Actual Issue Date: Settlement Date: Maturity Date:

Result

Face Value:
Price per $100.00:
Days in Year:
Days to Maturity:
Discount Rate:
Holding Period Return:
Holding Period Yield (HPY):
Annualized Yield:
Coupon Equivalent Yield (CEY):