A Treasury bill is a short-term security from the U.S. Treasury, backed by the full faith and credit of the U.S. government, with terms from 4 to 52 weeks. A bank CD is a deposit, insured by the FDIC up to $250,000 per depositor, per bank, per ownership category. Treasury bill interest is exempt from state and local income tax; CD interest is taxed federally, and your state’s own rules apply.
What’s the difference, side by side?
| Question | Treasury bill | Bank CD |
|---|---|---|
| What it is | A short-term security issued by the U.S. Treasury (TreasuryDirect) | A deposit that holds a set amount for a set time (Investor.gov) |
| What protects it | The full faith and credit of the U.S. government (TreasuryDirect) | FDIC insurance at banks, NCUA at credit unions, up to the limits (FDIC) |
| Terms | 4, 6, 8, 13, 17, 26 and 52 weeks | Set by the bank, often months to several years |
| How you earn | You pay less than face value (or face value) and receive face value at maturity | Interest at a stated rate, shown with its annual percentage yield (APY) (Regulation DD) |
| Smallest purchase | $100 at TreasuryDirect | Set by the bank |
| Federal income tax | Yes | Yes (IRS Topic 403) |
| State and local income tax | Exempt (IRS Topic 403) | Your state’s rules apply |
| Need the money early? | Sell it before maturity; the price can be higher or lower than you paid (Investor.gov) | Usually an early-withdrawal penalty (FINRA) |
This page compares; it doesn’t recommend. Which fits depends on your situation, and rates change, so we don’t quote any.
Are Treasury bills FDIC insured?
No. Treasury bills aren’t bank deposits, so FDIC insurance doesn’t apply to them. They are backed by the full faith and credit of the U.S. government instead (TreasuryDirect).
How are CDs protected?
A CD at an FDIC-insured bank is insured together with your other deposits in the same ownership category at that bank, up to $250,000 per depositor, per bank, per category (FDIC). At a federally insured credit union, NCUA insurance works the same basic way (NCUA). Amounts above the limit at one bank aren’t insured. Our insurance guide and screening tool shows how the categories add up.
What if I need the money before it matures?
With a CD from a bank, cashing in early usually costs a penalty (FINRA). The bank’s disclosure for your CD states how much. A Treasury bill isn’t cashed in early; it is sold to someone else at the market price, which can be higher or lower than what you paid. Held to maturity, it pays its face value (TreasuryDirect).
What about CDs bought through a brokerage?
“Brokered” CDs are issued by banks but sold through brokerages. The deposit is insured at the issuing bank, but there is usually no early withdrawal from the bank: you sell the CD, and you may get back less than you put in. Some can be “called”, which lets the bank, not you, end the CD early (SEC investor bulletin).
How do I keep track of them?
For each one, write down where it’s held, the amount, and the maturity date. Treasury bills belong in a “U.S. Treasury-backed” group and CDs in “insured deposits”, so you can see your mix at a glance. A calendar note a few weeks before each maturity date gives you time to decide what to do next; see what happens when a CD matures.
Common questions
Are Treasury bills FDIC insured?
No. Treasury bills aren’t bank deposits, so FDIC insurance doesn’t apply. They are backed by the full faith and credit of the U.S. government instead.
Do I pay state income tax on Treasury bill interest?
No. Interest on Treasury securities is exempt from state and local income tax. It is still subject to federal income tax.
What terms do Treasury bills come in?
TreasuryDirect lists terms of 4, 6, 8, 13, 17, 26 and 52 weeks.
Can I lose money on a Treasury bill?
Held to maturity, a Treasury bill pays its face value. If you sell it before then, the price can be higher or lower than what you paid.
Sources
Each source was checked on October 8, 2026. Rules and limits can change; when it matters, check the source.
- U.S. Treasury / TreasuryDirect: Treasury Bills
- U.S. Treasury / TreasuryDirect: Treasury Marketable Securities
- IRS: Topic no. 403, Interest received, updated October 7, 2026
- FDIC: Deposit Insurance at a Glance, updated April 1, 2024
- NCUA: Share Insurance Coverage, updated May 20, 2025
- SEC / Investor.gov: Certificates of Deposit (CDs)
- SEC / Investor.gov: Bonds
- FINRA: Bank Products
- SEC Office of Investor Education: Brokered CDs – Investor Bulletin, updated November 30, 2023
- eCFR: 12 CFR 1030.2 and Appendix A (Regulation DD, Truth in Savings), updated October 6, 2026
More free guides
Is my money insured?
Check FDIC and NCUA coverage by bank and ownership type, with a free screening tool.
FDIC, NCUA, SIPC or the Treasury?
One table showing what protects each kind of account, and what doesn’t.
Money market fund or money market account?
Two products with nearly the same name and very different protection.
Keeping records of interest and dividends
Cash or reinvested, 1099-INT or 1099-DIV, and what to report.
What happens when a CD matures?
Grace periods, automatic renewal, and the notice your bank must send first.
Helping a parent with money
What to write down first, who can act for a parent, and where to get help.