Where to Keep Your Cash: Every Option Ranked After Tax

Where you park cash matters more than it looks. The headline rates are close together, but they are taxed differently: Treasury bills and I bonds are exempt from state and local income tax, some money-market funds pass part of that exemption along, and bank interest is taxed in full. A CD locks your rate in and charges you to leave early. A savings account can change its rate tomorrow. Put in your numbers and every option is ranked by what you keep.

01Your Numbers

Every quoted rate is first turned into what it actually earns over the time you chose, so they can be compared: a fund's 7-day yield and a bill's investment yield are shown "as an APY" underneath. "After tax" is that yearly rate after your federal, state and local tax on the interest. "You keep" is the interest left over for the time you chose, after tax and any early-exit penalty, assuming the tax is paid each year from other money so the interest stays invested. Options you cannot use at your amount or for your time are listed at the bottom, not ranked. Savings accounts and money-market funds assume today's rate holds, which it will not exactly do; CDs and T-bills are locked in; I bonds use the rate you set for after their first six months. Above $10,000, the I bond row puts $10,000 (the yearly limit) in I bonds and the rest in the best standard savings account. Tax rates come from the 2026 brackets in our paycheck calculator, applied to your income as your top (marginal) rate. Interest is assumed to be taxed in the year it is earned.

02The Rate a Bank Needs to Match a T-Bill

Treasury bill interest is taxed by the federal government but not by states or cities. That means a bank account has to pay more than a T-bill just to break even after tax, and how much more depends on where you live. Pick a bill: the break-even rate below is the APY a bank account would need to leave you the same dollars after tax as the bill, over the amount and time you chose above, and the map shows it in every state.

Tap a state to make it yours in the calculator. New York City residents pay city income tax on bank interest as well; pick New York City in the list. Dollars use your amount and time above.

03What Your Cash Turns Into

The same ranking as a picture: the interest you keep on $25,000 over 12 months, after tax and penalties. The national averages sit near the bottom for a reason: most money in American savings accounts earns close to nothing.

04How Fast Can You Get Your Money?

Higher rates usually cost you access. Here is every option sorted by how quickly the cash is back in your checking account, with the after-tax rate for your numbers.

05Head to Head

Pick any two and see them side by side on your numbers.

06Today's Rates

Every rate on this page, how it is quoted, when we checked it and where it came from. Treasury bill yields update every business day from Treasury and the national averages monthly from the FDIC; we check the bank, CD and fund rates by hand every week. A date in red means the rate is older than we would like, so check it with the provider before you act on it.

These rates are quoted in different ways, so the calculator converts them before comparing. A bank's APY already includes compounding. A bill's investment yield (Treasury's coupon-equivalent yield, not the lower discount rate that auctions quote) is a simple yearly rate for one bill; the calculator compounds it as bills are rolled over. A money-market fund's 7-day SEC yield is its last week of income after fees as a simple yearly rate; the calculator assumes the dividends are reinvested monthly. The I bond rate is for its first six months and compounds every six months.

07The Fine Print

What each kind of account promises, what it costs to leave early, and what protects your money if the bank or broker fails.

08Questions, Answered

09How We Compare

The math

Each option's quoted rate is turned into the interest it earns over the time you chose. Bank APYs compound as quoted. Treasury bills roll into new bills at today's yield, and are assumed to be sold through a broker at an unchanged yield if you choose a time shorter than the bill. Money-market fund yields are compounded monthly, as funds reinvest dividends. A CD held past its term renews at the same rate; leave before the term, or partway into a renewal, and its early-withdrawal penalty comes off. I bonds need 12 months, earn today's rate for six months and then the rate you set, lose their last three months of interest before five years, and take only $10,000 a year: above that, the rest goes into the best standard savings account on the list. Options with a minimum above your amount are not ranked. The break-even rate uses the same arithmetic: it is the APY that would leave you the same dollars after tax as the bill, for your amount and time.

The tax

We apply your top federal rate and your state rate (plus New York City's, if you pick it) to the interest, using the 2026 brackets after the standard deduction. Bank interest is fully taxed. T-bills and I bonds are free of state tax. For money-market funds we use each fund's own share of income from U.S. government securities in its most recent tax year, and none in California, Connecticut or New York for funds that did not meet those states' test. The tax on each year's interest is assumed to be paid from other money, so all the interest stays invested; if you pay it out of the account instead, longer periods earn a little less. We ignore the deduction for state taxes for people who itemize, the net investment income tax and the alternative minimum tax, which can all change the answer at the margin.

How we make money

No bank, broker or fund pays DaveManuel.com for this page, and every link goes to the provider's own page or our source. If that changes, the link will say so, and it will not change the order: the order comes from the arithmetic above.

More from DaveManuel Money: all comparisons, which cash-back card pays you the most, the Canadian version of this page, the compound interest calculator and every Fed rate hike cycle since 1954.

This page is for information, not financial or tax advice. Rates change; check them with the provider before you move money.