US Treasury Bill Calculator
Calculate the discount, bank discount yield, and bond equivalent yield for a US Treasury Bill. T-Bills are zero-coupon securities sold at a discount to face value.
Results
What is it?
US Treasury Bills are short-term government securities sold at a discount to their face value and redeemed at par. They pay no coupons — your return is the difference between the purchase price and the face value. The Bank Discount Yield uses a 360-day year and the face value as the base, while the Bond Equivalent Yield uses a 365-day year and the purchase price, making it comparable to coupon-bearing bond yields.
How to use
Enter the T-Bill's face value (commonly $10,000), the price you paid, and the number of days until maturity. The calculator computes the dollar discount, the bank discount yield (the convention used by dealers), and the bond equivalent yield (used to compare against coupon bonds).
Example scenario
You purchase a 91-day T-Bill with a $10,000 face value for $9,800. The dollar discount is $200. Bank Discount Yield = ($200/$10,000) × (360/91) × 100 ≈ 7.912%. Bond Equivalent Yield = ($200/$9,800) × (365/91) × 100 ≈ 8.189%. The BEY is higher because it uses the actual investment (purchase price) and a 365-day year.
Pro tip
The bank discount yield always understates the true return because it divides by face value (larger) rather than purchase price (your actual investment). For comparing T-Bills to other investments, always use the Bond Equivalent Yield. For T-Bills with more than 182 days to maturity, the BEY formula becomes more complex — this calculator uses the simple version valid for bills of 182 days or fewer.