The Real Yield Map: After-Tax, After-Inflation Returns on Cash in Every State (2026)
Savings rates look good until tax and inflation take their cut. We ran a 3-month T-bill and a savings account paying the same rate through every state's income tax at three incomes, then subtracted inflation.
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📐 Figures verified Sep 28, 2026 against the 3-month Treasury bill rate on FRED (DTB3, September 24, 2026), the FDIC national average savings rate (September 2026), the August 2026 Consumer Price Index, the IRS's 2026 federal brackets (Rev. Proc. 2025-32) and the Tax Foundation's table of 2026 state income tax brackets. Local income taxes are not included.
With inflation at 3.4%, cash barely holds its value even at today's rates. A 3-month T-bill yields 4.08%, which is 3.18% after federal tax in the 22% bracket, a real return of −0.22%. T-bills beat an equal-rate savings account most in California, Oregon, District of Columbia and Hawaii, because states can't tax Treasury interest.
Numbers That Matter
| Figure | Amount | Source | Verified |
|---|---|---|---|
| 3-month Treasury bill rate | 4.08% on September 24, 2026 | FRED, DTB3 | Sep 28, 2026 |
| National average savings rate | 0.37% in September 2026 | FDIC national rates | Sep 28, 2026 |
| Inflation, 12 months to August 2026 | 3.4% (CPI-U) | Bureau of Labor Statistics | Sep 28, 2026 |
| Federal rate for a single filer earning $100,000 | 22% (taxable income $50,400 to $105,700 in 2026) | IRS Rev. Proc. 2025-32 | Sep 28, 2026 |
| Net investment income tax | 3.8% on interest above $200,000 of income (single) | IRS | Sep 28, 2026 |
| State tax on Treasury bill interest | None: exempt from state and local income tax | TreasuryDirect | Sep 28, 2026 |
What the Numbers Show
- Money at the average savings rate is melting. At 0.37%, a single filer earning $100,000 keeps about 0.29% after federal tax in a state without income tax, a real return of −3.11% a year: $10,000 loses about $311.14 of buying power.
- Even Treasury bills barely hold value. In the 22% bracket, 4.08% becomes 3.18%, just under inflation. Only in the 12% bracket does cash beat inflation: T-bills by 0.19% a year in every state, since states can't tax them, and a savings account at the same rate only where the state takes less than about 4.7% of interest.
- State tax decides who gains most from T-bills. At $100,000, T-bills beat a savings account paying the same rate by $37.94 a year per $10,000 in California, $35.70 in Oregon and $34.68 in District of Columbia. At $250,000, Oregon ($40.39) and Minnesota ($40.19) lead.
- In nine states the edge is zero. Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming don't tax interest, so there a savings account and a T-bill at the same rate leave you with the same money.
The Real Yield Map: A Single Filer Earning $100,000
Every state ranked by how much more a Treasury bill keeps than a high-yield savings account paying the same 4.08%, with both yields after federal and state tax and the real return after 3.4% inflation.
| Rank | State | State rate on interest | Savings at 4.08%, after tax | T-bills, after tax | Real: savings | Real: T-bills | T-bill edge per $10,000 a year |
|---|---|---|---|---|---|---|---|
| 1 | California | 9.30% | 2.80% | 3.18% | −0.60% | −0.22% | $37.94 |
| 2 | Oregon | 8.75% | 2.83% | 3.18% | −0.57% | −0.22% | $35.70 |
| 3 | District of Columbia | 8.50% | 2.84% | 3.18% | −0.56% | −0.22% | $34.68 |
| 4 | Hawaii | 7.60% | 2.87% | 3.18% | −0.53% | −0.22% | $31.01 |
| 5 | Maine | 7.15% | 2.89% | 3.18% | −0.51% | −0.22% | $29.17 |
| 6 | Minnesota | 6.80% | 2.90% | 3.18% | −0.50% | −0.22% | $27.74 |
| 7 | Delaware | 6.60% | 2.91% | 3.18% | −0.49% | −0.22% | $26.93 |
| 8 | Vermont | 6.60% | 2.91% | 3.18% | −0.49% | −0.22% | $26.93 |
| 9 | New Jersey | 6.37% | 2.92% | 3.18% | −0.48% | −0.22% | $25.99 |
| 10 | South Carolina | 6% | 2.94% | 3.18% | −0.46% | −0.22% | $24.48 |
| 11 | New York | 5.90% | 2.94% | 3.18% | −0.46% | −0.22% | $24.07 |
| 12 | Virginia | 5.75% | 2.95% | 3.18% | −0.45% | −0.22% | $23.46 |
| 13 | Montana | 5.65% | 2.95% | 3.18% | −0.45% | −0.22% | $23.05 |
| 14 | Kansas | 5.58% | 2.95% | 3.18% | −0.45% | −0.22% | $22.77 |
| 15 | Connecticut | 5.50% | 2.96% | 3.18% | −0.44% | −0.22% | $22.44 |
| 16 | Idaho | 5.30% | 2.97% | 3.18% | −0.43% | −0.22% | $21.62 |
| 17 | Wisconsin | 5.30% | 2.97% | 3.18% | −0.43% | −0.22% | $21.62 |
| 18 | Georgia | 5.19% | 2.97% | 3.18% | −0.43% | −0.22% | $21.18 |
| 19 | Alabama | 5% | 2.98% | 3.18% | −0.42% | −0.22% | $20.40 |
| 20 | Massachusetts | 5% | 2.98% | 3.18% | −0.42% | −0.22% | $20.40 |
| 21 | Illinois | 4.95% | 2.98% | 3.18% | −0.42% | −0.22% | $20.20 |
| 22 | New Mexico | 4.90% | 2.98% | 3.18% | −0.42% | −0.22% | $19.99 |
| 23 | West Virginia | 4.82% | 2.99% | 3.18% | −0.41% | −0.22% | $19.67 |
| 24 | Maryland | 4.75% | 2.99% | 3.18% | −0.41% | −0.22% | $19.38 |
| 25 | Rhode Island | 4.75% | 2.99% | 3.18% | −0.41% | −0.22% | $19.38 |
| 26 | Missouri | 4.70% | 2.99% | 3.18% | −0.41% | −0.22% | $19.18 |
| 27 | Nebraska | 4.55% | 3.00% | 3.18% | −0.40% | −0.22% | $18.56 |
| 28 | Oklahoma | 4.50% | 3.00% | 3.18% | −0.40% | −0.22% | $18.36 |
| 29 | Utah | 4.50% | 3.00% | 3.18% | −0.40% | −0.22% | $18.36 |
| 30 | Colorado | 4.40% | 3.00% | 3.18% | −0.40% | −0.22% | $17.95 |
| 31 | Michigan | 4.25% | 3.01% | 3.18% | −0.39% | −0.22% | $17.34 |
| 32 | Mississippi | 4% | 3.02% | 3.18% | −0.38% | −0.22% | $16.32 |
| 33 | North Carolina | 3.99% | 3.02% | 3.18% | −0.38% | −0.22% | $16.28 |
| 34 | Arkansas | 3.90% | 3.02% | 3.18% | −0.38% | −0.22% | $15.91 |
| 35 | Iowa | 3.80% | 3.03% | 3.18% | −0.37% | −0.22% | $15.50 |
| 36 | Kentucky | 3.50% | 3.04% | 3.18% | −0.36% | −0.22% | $14.28 |
| 37 | Pennsylvania | 3.07% | 3.06% | 3.18% | −0.34% | −0.22% | $12.53 |
| 38 | Louisiana | 3% | 3.06% | 3.18% | −0.34% | −0.22% | $12.24 |
| 39 | Indiana | 2.95% | 3.06% | 3.18% | −0.34% | −0.22% | $12.04 |
| 40 | Ohio | 2.75% | 3.07% | 3.18% | −0.33% | −0.22% | $11.22 |
| 41 | Arizona | 2.50% | 3.08% | 3.18% | −0.32% | −0.22% | $10.20 |
| 42 | North Dakota | 1.95% | 3.10% | 3.18% | −0.30% | −0.22% | $7.96 |
| 43 | Alaska | 0% | 3.18% | 3.18% | −0.22% | −0.22% | $0.00 |
| 44 | Florida | 0% | 3.18% | 3.18% | −0.22% | −0.22% | $0.00 |
| 45 | Nevada | 0% | 3.18% | 3.18% | −0.22% | −0.22% | $0.00 |
| 46 | New Hampshire | 0% | 3.18% | 3.18% | −0.22% | −0.22% | $0.00 |
| 47 | South Dakota | 0% | 3.18% | 3.18% | −0.22% | −0.22% | $0.00 |
| 48 | Tennessee | 0% | 3.18% | 3.18% | −0.22% | −0.22% | $0.00 |
| 49 | Texas | 0% | 3.18% | 3.18% | −0.22% | −0.22% | $0.00 |
| 50 | Washington | 0% | 3.18% | 3.18% | −0.22% | −0.22% | $0.00 |
| 51 | Wyoming | 0% | 3.18% | 3.18% | −0.22% | −0.22% | $0.00 |
The T-Bill Edge by Income
The same comparison at three single-filer incomes: the state's marginal rate on interest and the T-bill's yearly edge per $10,000 at each. In flat-tax states the edge doesn't change with income; in graduated states it grows with it.
| State | State rate, $50,000 | Edge, $50,000 | State rate, $100,000 | Edge, $100,000 | State rate, $250,000 | Edge, $250,000 |
|---|---|---|---|---|---|---|
| Alabama | 5% | $20.40 | 5% | $20.40 | 5% | $20.40 |
| Alaska | 0% | $0.00 | 0% | $0.00 | 0% | $0.00 |
| Arizona | 2.50% | $10.20 | 2.50% | $10.20 | 2.50% | $10.20 |
| Arkansas | 3.90% | $15.91 | 3.90% | $15.91 | 3.90% | $15.91 |
| California | 6% | $24.48 | 9.30% | $37.94 | 9.30% | $37.94 |
| Colorado | 4.40% | $17.95 | 4.40% | $17.95 | 4.40% | $17.95 |
| Connecticut | 4.50% | $18.36 | 5.50% | $22.44 | 6.50% | $26.52 |
| Delaware | 5.55% | $22.64 | 6.60% | $26.93 | 6.60% | $26.93 |
| District of Columbia | 6% | $24.48 | 8.50% | $34.68 | 8.50% | $34.68 |
| Florida | 0% | $0.00 | 0% | $0.00 | 0% | $0.00 |
| Georgia | 5.19% | $21.18 | 5.19% | $21.18 | 5.19% | $21.18 |
| Hawaii | 7.20% | $29.38 | 7.60% | $31.01 | 9% | $36.72 |
| Idaho | 5.30% | $21.62 | 5.30% | $21.62 | 5.30% | $21.62 |
| Illinois | 4.95% | $20.20 | 4.95% | $20.20 | 4.95% | $20.20 |
| Indiana | 2.95% | $12.04 | 2.95% | $12.04 | 2.95% | $12.04 |
| Iowa | 3.80% | $15.50 | 3.80% | $15.50 | 3.80% | $15.50 |
| Kansas | 5.58% | $22.77 | 5.58% | $22.77 | 5.58% | $22.77 |
| Kentucky | 3.50% | $14.28 | 3.50% | $14.28 | 3.50% | $14.28 |
| Louisiana | 3% | $12.24 | 3% | $12.24 | 3% | $12.24 |
| Maine | 6.75% | $27.54 | 7.15% | $29.17 | 7.15% | $29.17 |
| Maryland | 4.75% | $19.38 | 4.75% | $19.38 | 5.50% | $22.44 |
| Massachusetts | 5% | $20.40 | 5% | $20.40 | 5% | $20.40 |
| Michigan | 4.25% | $17.34 | 4.25% | $17.34 | 4.25% | $17.34 |
| Minnesota | 6.80% | $27.74 | 6.80% | $27.74 | 9.85% | $40.19 |
| Mississippi | 4% | $16.32 | 4% | $16.32 | 4% | $16.32 |
| Missouri | 4.70% | $19.18 | 4.70% | $19.18 | 4.70% | $19.18 |
| Montana | 4.70% | $19.18 | 5.65% | $23.05 | 5.65% | $23.05 |
| Nebraska | 4.55% | $18.56 | 4.55% | $18.56 | 4.55% | $18.56 |
| Nevada | 0% | $0.00 | 0% | $0.00 | 0% | $0.00 |
| New Hampshire | 0% | $0.00 | 0% | $0.00 | 0% | $0.00 |
| New Jersey | 5.53% | $22.56 | 6.37% | $25.99 | 6.37% | $25.99 |
| New Mexico | 4.70% | $19.18 | 4.90% | $19.99 | 5.90% | $24.07 |
| New York | 5.40% | $22.03 | 5.90% | $24.07 | 6.85% | $27.95 |
| North Carolina | 3.99% | $16.28 | 3.99% | $16.28 | 3.99% | $16.28 |
| North Dakota | 1.95% | $7.96 | 1.95% | $7.96 | 1.95% | $7.96 |
| Ohio | 2.75% | $11.22 | 2.75% | $11.22 | 2.75% | $11.22 |
| Oklahoma | 4.50% | $18.36 | 4.50% | $18.36 | 4.50% | $18.36 |
| Oregon | 8.75% | $35.70 | 8.75% | $35.70 | 9.90% | $40.39 |
| Pennsylvania | 3.07% | $12.53 | 3.07% | $12.53 | 3.07% | $12.53 |
| Rhode Island | 3.75% | $15.30 | 4.75% | $19.38 | 5.99% | $24.44 |
| South Carolina | 6% | $24.48 | 6% | $24.48 | 6% | $24.48 |
| South Dakota | 0% | $0.00 | 0% | $0.00 | 0% | $0.00 |
| Tennessee | 0% | $0.00 | 0% | $0.00 | 0% | $0.00 |
| Texas | 0% | $0.00 | 0% | $0.00 | 0% | $0.00 |
| Utah | 4.50% | $18.36 | 4.50% | $18.36 | 4.50% | $18.36 |
| Vermont | 3.35% | $13.67 | 6.60% | $26.93 | 7.60% | $31.01 |
| Virginia | 5.75% | $23.46 | 5.75% | $23.46 | 5.75% | $23.46 |
| Washington | 0% | $0.00 | 0% | $0.00 | 0% | $0.00 |
| West Virginia | 4.44% | $18.12 | 4.82% | $19.67 | 4.82% | $19.67 |
| Wisconsin | 4.40% | $17.95 | 5.30% | $21.62 | 5.30% | $21.62 |
| Wyoming | 0% | $0.00 | 0% | $0.00 | 0% | $0.00 |
Why T-Bills Win Where Taxes Are High
Interest on Treasury bills is taxed by the federal government but exempt from state and local income tax, while interest from a bank savings account, a CD or most money market funds is taxed by both. At the same yield, the T-bill's advantage is the yield times your state's marginal rate: at 4.08% and a 9.3% rate, that is about 0.38 percentage points, or $37.94 a year on $10,000.
Treasury bills aren't the only way to get the exemption. A Treasury-only money market fund passes it through, and a government money fund passes through part of it, depending on how much it holds in Treasurys and on your state's rules. The Cash Yield Showdown handles those cases.
Methodology
Yields: the 3-month Treasury bill secondary-market rate on FRED (DTB3) for September 24, 2026, on a discount basis, and the FDIC national average savings rate for September 2026. The savings account in the map pays the same rate as the T-bill, the best case for a high-yield account. Inflation is the 12-month change in the CPI-U to August 2026. Federal rates are the 2026 brackets for a single filer after the $16,100 standard deduction (12%, 22% and 32% at $50,000, $100,000 and $250,000), plus the 3.8% net investment income tax at $250,000.
State rates are the statutory marginal rate for a single filer at each income, after the state's standard deduction and personal exemption, from the Tax Foundation's 2026 table. Washington taxes capital gains but not interest, so it counts as a no-tax state here. Local income taxes (New York City, Maryland counties and others) are left out, as is the federal deduction for state taxes, which matters only if you itemize. Real returns are the after-tax yield minus inflation; the edge is the after-tax difference on $10,000 for a year.
Worked Example: $25,000 in Oregon
- In a savings account at 4.08%: federal (32% plus 3.8%) and Oregon (9.9%) tax take 45.7% of the interest, leaving 2.22%, or $553.86 a year on $25,000.
- In 3-month T-bills at the same rate: no Oregon tax, so 2.62%, or $654.84 a year: $100.98 more.
- After 3.4% inflation: the savings account loses 1.18% of buying power a year, the T-bills 0.78%.
- At the national average savings rate: the same $25,000 would lose about $799.77 of buying power a year.
Rates held steady for a year; T-bills roll over every three months at whatever rate the next auction sets.
Decision Rules
If this, then that
- If you live in a high-tax state and hold cash for months → compare T-bills or a Treasury-only fund with savings after state tax, not before.
- If you live in a state without income tax → pick on yield, access and convenience; the tax edge is zero.
- If your savings pays close to the national average → move it; almost any high-yield option beats 0.37% by more than any tax difference.
- If you may need the money on short notice → keep that part in savings; a T-bill sold early gets the market price.
Mistakes to avoid
- Comparing yields before tax.
- Forgetting that T-bill interest is still federally taxable.
- Assuming every money market fund escapes state tax.
- Counting the nominal yield as your gain when inflation is higher.
Related: T-bills vs savings vs CDs compares the options in depth; how to build a T-bill ladder covers buying and rolling bills; high-yield savings accounts explains the bank side; and real interest rates shows why inflation matters.