Treasury bill yield calculator: discount to annual yield

How it works

A treasury bill pays no coupon: you buy it below its face value and the government repays the face value at maturity. The difference is your interest. The calculator turns it into:

• the simple annual yield: (face − price) ÷ price × 365 ÷ days;
• the effective annual yield if you reinvest at the same rate: (face ÷ price)^(365 ÷ days) − 1;
• the discount rate on the face value: (face − price) ÷ face × 365 ÷ days.

Example: paying 92,500 for a 364-day bill with a face value of 100,000 gives a yield of about 8.13% and a discount rate of about 7.52%.

Compare like with like

Central banks publish auction results either as a discount rate or as a yield, and some use a 360-day year: always check which one a figure is before comparing it with a savings rate.

Limits

Withholding tax on the interest, broker or bank fees and inflation are not included — the real return calculator shows what the yield is worth after inflation.