Treasury Bill Discount Yield Calculator

About this calculator

Treasury bills are sold at a discount to face value and mature at par, so their return is expressed as a bank discount yield: ((Face Value − Purchase Price) / Face Value) × (360 / Days to Maturity), using a 360-day banker's year. Because this understates the true return (it divides by face value rather than the actual price paid, and uses a 360- instead of 365-day year), a bond-equivalent yield is also calculated to make T-bills comparable to interest-bearing bonds quoted on an actual/365 basis.

Fixed-income traders, Treasury investors and money-market analysts use both figures side by side — the discount yield because it is the quoting convention used in the T-bill market itself, and the bond-equivalent yield to compare a T-bill's return fairly against coupon-paying bonds or other yield-quoted instruments.