Treasury bills vs money market funds, after tax
Daily bill rates from the Treasury for November 6, 2026 against Treasury money funds as filed. Not investment advice.
Example result
VUSXX after federal and California tax
2.96%
$1,478 a year kept on $1,945 of dividends
| Dividends before tax | $1,945 |
| Federal tax at 24.0% | −$467 |
| State tax at 9.30% $1,945 of the $1,945 is free of California tax | −$0 |
Treasury bill after federal and California tax
3.00%
$1,501 a year kept on $1,975 of dividends
Treasury bill leaves $23 more a year than VUSXX.
Yield reported by the fund for October 30, 2026; yields change daily. Estimate, not tax or investment advice. Nothing you type leaves your browser. How it is computed
The same tax treatment, different mechanics
A Treasury bill and a Treasury-only money fund pay income from the same source, so the tax side of the comparison is short: federal income tax on both, no state tax on either, as long as the fund holds Treasuries directly rather than through repo. The difference is in the mechanics and in cost. A bill bought at auction or from a broker pays the rate fixed on the day of purchase until it matures, four weeks to a year later, and then has to be rolled into a new one. A fund does that rolling every day across its whole portfolio, keeps a share price of $1.00, lets you sell on any business day, and charges for it. On November 6, 2026 the 4-week bill paid 3.95% on a coupon-equivalent basis. For October 30, 2026, about a week earlier, the highest-yielding retail Treasury-only fund in the data, NCGXX, filed 3.99% and VUSXX 3.89%. On $50,000 the difference between the bill and VUSXX is about $30 a year before tax, if the rates held for a year, which they will not exactly.
One more difference: a fund’s yield trails market rates. Its bills were bought over the past weeks, so when the Federal Reserve cuts, the fund keeps paying the older, higher rates for a while; when it raises, the fund catches up with a delay. A bill fixes one rate for its term.
Bill rates and Treasury-only funds
| Instrument | Yield | Date |
|---|---|---|
| 4-week bill (coupon-equivalent) | 3.95% | November 6, 2026 |
| 13-week bill (coupon-equivalent) | 4.11% | November 6, 2026 |
| 26-week bill (coupon-equivalent) | 4.26% | November 6, 2026 |
| 52-week bill (coupon-equivalent) | 4.32% | November 6, 2026 |
| NCGXX North Capital Treasury Money Market Fund | 3.99% | October 30, 2026 |
| GABXX Gabelli U.S Treasury Money Market Fund | 3.90% | October 30, 2026 |
| VUSXX Vanguard Treasury Money Market Fund | 3.89% | October 30, 2026 |
| NPYXX Treasury Instruments Portfolio | 3.86% | October 30, 2026 |
| JMMF JPMorgan 100% U.S. Treasury Securities Money Market ETF | 3.86% | October 30, 2026 |
| MUSXX NYLIM U.S. Government Liquidity Fund | 3.84% | October 30, 2026 |
Bill rates: Treasury daily bill rates. Fund yields: 7-day net yields as filed in Form N-MFP. Six highest of the 24 retail Treasury-only share classes in the data.
Questions about this page
Tap a question to see the answer.
Are Treasury bills taxed by states?
No. Interest on Treasury bills is exempt from state and local income tax in every state, by federal law, and there is no 50% test for a bill you own directly. It is taxed federally as ordinary income in the year the bill matures or is sold, not month by month as fund dividends are.
Why does a bill yield more than a Treasury money fund?
A fund deducts its expenses, 0.07% at VUSXX on the filed figures, and holds bills of mixed maturities, some bought when rates were different. A bill bought today locks in today’s rate until it matures. When rates fall the fund lags downward; when they rise it lags upward.
What does coupon-equivalent mean on a bill rate?
Bills are sold at a discount and repaid at face value. The Treasury publishes both the discount rate and a coupon-equivalent rate, which restates the return on the price paid over a 365-day year, comparable with a money fund’s 7-day yield. This page uses the coupon-equivalent figure.
Other pages
Filings, rules and tax schedules behind this page
Compiled by Radif Partners
Independent publisher of money market fund yield and after-tax calculators built on Form N-MFP filings
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Fund data as filed for 2026, site checked on