The Ultimate Guide to Treasury Bill ETFs (February 2026)
Everything you need to know about Treasury Bill ETFs: What they are, why smart investors use them for cash management, and how to buy them.
If you have cash sitting in a traditional checking account, it’s likely losing value every single day due to inflation. Even high-yield savings accounts, while better, often come with strings attached or fully taxable interest. Enter the Treasury Bill ETF—a powerful tool used by wealthy investors and corporations to keep their cash safe, liquid, and working hard.
Here is your plain-English guide to understanding what they are, why you might want one, and how to get started.
What exactly is a T-Bill ETF?
To understand the ETF, we first need to understand the underlying asset: the Treasury Bill (T-Bill).
When the U.S. government needs money to pay its bills, it borrows from investors by issuing debt. Short-term debt (maturing in one year or less) is called a Treasury Bill. Because the U.S. government has the power to tax and print money, these are considered the “risk-free” benchmark for the entire financial world. You lend Uncle Sam $100, and he promises to pay you back $100 plus interest.
A T-Bill ETF (Exchange Traded Fund) is simply a basket of these T-Bills wrapped up into a single ticker symbol that you can trade on the stock market. Instead of buying individual bills from the Treasury website (which can be clunky), you buy shares of a fund like SGOV or BIL directly from your brokerage account, just like you would buy a share of Apple or Tesla.
The ETF manager handles the complex work: buying new bills, collecting the interest, and distributing it to you as a monthly dividend.
Why choose a T-Bill ETF over a Savings Account?
There are three killer reasons to consider moving your “lazy cash” into a T-Bill ETF:
1. The State Tax Shield This is the biggest secret weapon. Interest earned from a regular High-Yield Savings Account (HYSA) is fully taxable at both the federal and state levels. However, interest earned from U.S. Treasury obligations is exempt from state and local income taxes.
If you live in a high-tax state like California, New York, or Massachusetts, this effectively boosts your “real” return significantly compared to a standard bank account.
2. Extreme Safety and Liquidity T-Bill ETFs invest in short-term government debt. Unlike a CD (Certificate of Deposit), your money isn’t locked up for months. You can sell your ETF shares any day the stock market is open and have your cash available almost immediately.
3. Competitive Yields These funds track the Federal Reserve’s interest rates very closely. While banks effectively take a “cut” of the profit before setting your savings rate, T-Bill ETFs pass through the vast majority of the government yield to you, minus a very small management fee (often roughly 0.07% to 0.15%).
When should you use them?
T-Bill ETFs are excellent for specific financial jobs:
- Parking Cash for Short-Term Goals: Saving for a house down payment, a wedding, or a tax bill due in 6 months? This keeps the principal safe while earning steady interest.
- Emergency Fund (Tier 2): Keep a month of expenses in checking for immediate needs, but put the rest of your 6-month buffer in a T-Bill ETF to fight inflation.
- Waiting for Opportunities: If you are keeping “dry powder” ready to invest in the stock market during a dip, holding it in a T-Bill ETF pays you to wait.
The Best T-Bill ETFs (Updated Dynamically)
Here are the top funds holding short-term U.S. Treasuries, sorted by their 30-day SEC yield. These are “cash-like” instruments designed for stability.
> Pro Tip: Funds like SGOV and BIL hold very short-duration bills (0-3 months), making them the most stable and “cash-like” in value. Funds with slightly longer durations (like SHV) might see tiny price fluctuations if interest rates change drastically.
How to Buy
Buying a T-Bill ETF is indistinguishable from buying a stock.
- Open your Brokerage App: Use Fidelity, Schwab, Vanguard, Robinhood, or any major broker.
- Search the Ticker: Type in “SGOV” or “TBLL”.
- Place a Buy Order: Enter the dollar amount or number of shares you want.
- Done: You now own a slice of U.S. government debt. You will typically see a monthly dividend deposit in your account.
Summary: Banks vs. T-Bill ETFs
| Feature | High-Yield Savings Account | T-Bill ETF (e.g., SGOV) |
|---|---|---|
| Yield | Determined by the bank (often lower) | Determined by the market (often higher) |
| State Taxes | Fully Taxable | Tax Exempt |
| Liquidity | Instant transfer | T+1 settlement (usually 1 day) |
| Ease of Use | Set and forget | Requires a brokerage trade |
| Safety | FDIC Insured (up to $250k) | US Treasury Backed (Unlimited) |
Disclaimer: This guide is for informational purposes only. Investment products are not FDIC insured, are not bank guaranteed, and may lose value.
Top 12 based on 30-day SEC yield (%):
Last updated: February 8, 2026
| Yield | Ticker | ETF | Net Expense Ratio | Net Assets (B) | Investment Objective | Fund Inception |
|---|---|---|---|---|---|---|
| 3.61% | TBLL | Invesco Treasury Collateral ETF → | 0.08 | $2.23 | US Treasury Obligations with a maximum remaining term to maturity of 12 months. | 12-Jan-17 |
| 3.59% | SGOV | iShares 0-3 Month Treasury Bond ETF → | 0.09 | $71.85 | US Treasury bonds with remaining maturities less than or equal to three months. | 26-May-20 |
| 3.59% | GBIL | Goldman Sachs Access Treasury 0-1 Year ETF → | 0.12 | $7.12 | FTSE US Treasury 0-1 Year Composite Select Index. | 6-Sep-16 |
| 3.57% | TFLO | iShares Treasury Floating Rate Bond ETF → | 0.15 | $6.40 | Bloomberg U.S. Treasury Floating Rate Index. | 3-Feb-14 |
| 3.57% | VBIL | Vanguard 0-3 Month Treasury Bill ETF → | 0.06 | $5.12 | Bloomberg U.S. Treasury Bills 0–3 Months Index. | 24-Jan-25 |
| 3.56% | USFR | WisdomTree Floating Rate Treasury Fund → | 0.15 | $16.32 | Bloomberg U.S. Treasury Floating Rate Bond Index. | 4-Feb-14 |
| 3.56% | XONE | BondBloxx Bloomberg One Year Target → | 0.03 | $0.72 | Bloomberg US Treasury 1 Year Duration Index. | 13-Sep-22 |
| 3.55% | SHV | iShares Short Treasury Bond ETF → | 0.15 | $19.89 | US Treasury bonds with remaining maturities one year or less. | 5-Jan-07 |
| 3.51% | BILS | SPDR® Bloomberg 3-12 Month T-Bill ETF → | 0.14 | $3.85 | US Treasury Bills with remaining maturities between 3 and 12 months. | 23-Sep-20 |
| 3.50% | BIL | SPDR® Bloomberg 1-3 Month T-Bill ETF → | 0.14 | $42.20 | US Treasury Bills that have a remaining maturities between 1 and 3 months. | 25-May-07 |
| 3.44% | TBIL | US Treasury 3 Month Bill ETF → | 0.15 | $6.34 | ICE BofA US 3-Month Treasury Bill Index (G0O1) | 9-Aug-22 |
| 3.43% | OBIL | US Treasury 12 Month Bill ETF → | 0.15 | $6.34 | ICE BofA US 12-Month Treasury Bill Index (G0O3) | 15-Nov-22 |