Treasury Bill Discount Rate Calculator
Compute a T-bill’s bank discount rate and bond-equivalent yield from its face value, purchase price, and days to maturity.
Result
How to use this calculator
- Enter the T-bill’s face value (what you receive at maturity).
- Enter the purchase price (what you pay today).
- Enter the days to maturity.
- Read the bank discount rate and the more meaningful bond-equivalent yield.
About this calculator
Treasury bills (T-bills) are short-term U.S. government securities sold at a discount to their face value; you pay less than face today and receive the full face value at maturity, with the difference being your return. They are quoted two ways, and the distinction matters. The bank discount rate is the traditional quote: the discount as a fraction of face value, annualized over a 360-day year. But because it measures the gain against face value (not the smaller price you actually paid) and uses a 360-day year, it understates your real return. The bond-equivalent yield (also called the investment yield) corrects both, measuring the gain against the price paid over a 365-day year — making it directly comparable to other investments. This calculator reports both from your face value, purchase price, and days to maturity.
How it works — the formula
Bank discount rate = (Face − Price)/Face × 360/days
Bond-equivalent yield = (Face − Price)/Price × 365/daysThe discount rate annualizes the gain against face on a 360-day basis; the bond-equivalent yield annualizes against price on a 365-day basis for true comparison.
Worked examples
- Inputs:
- face=10000, price=9750, days=182
- Output:
- discount 4.945%, BEY 5.142%
- Inputs:
- face=10000, price=9900, days=91
- Output:
- discount ~3.96%, BEY ~4.05%
- Inputs:
- face=1000, price=980, days=364
- Output:
- discount ~2.02%, BEY ~2.05%
Limitations
- Bank discount rate understates true return (use BEY to compare).
- Simple annualization; does not compound.
- Pre-tax yields; state-tax exemption not modeled.
Quoting conventions per TreasuryDirect; not investment advice.
Frequently asked
How is a T-bill discount rate calculated?+
What is the difference between discount rate and bond-equivalent yield?+
Why do T-bills use a 360-day year?+
How do T-bills pay interest?+
What maturities do T-bills come in?+
Are T-bill returns taxable?+
Related calculators
More tools you might like
Hand-picked tools that pair well with this one — same audience, same intent.
Compute a bond’s price, Macaulay duration, modified duration, and convexity from its coupon, yield to maturity, and term.
Estimate a callable bond’s yield to call from its coupon, call price, current market price, and time until the call date.
Convert a nominal annual rate into the effective annual rate for any compounding frequency, including continuous compounding.
IRR = the discount rate that makes NPV = 0. Solved numerically via Newton's method.
Sale price and savings from a percent-off, dollar-off, or stacked-coupon discount.
An equine (horse) bill of sale — buyer + seller, horse identity (registered name, breed, registry #, age, sex, color, markings, microchip), Coggins / CVI, vet pre-purchase exam, price, deposit, registration transfer, and signatures.