One Year Treasury Rate Calculator

Calculate Investment Yield and Bank Discount Rates for T-Bills

The amount the bill is worth at maturity.

The discounted price you paid for the bill.

Typically 364 days for a one-year Treasury bill.

Calculation Results

Investment Yield (BEY): –

Bank Discount Rate: –

Total Dollar Profit: –

Understanding the One Year Treasury Rate

A One-Year Treasury Bill (T-Bill) is a short-term debt obligation backed by the U.S. government with a maturity of one year. Unlike traditional bonds that pay periodic interest (coupons), Treasury bills are sold at a discount to their face value. Your return is the difference between the purchase price and the amount you receive at maturity.

Investment Yield vs. Discount Rate

When analyzing Treasury rates, two primary metrics are used:

• Investment Yield (Bond Equivalent Yield): This is the most accurate way to compare T-Bills to other investments. It uses a 365-day year and bases the return on the actual price paid.
• Bank Discount Rate: This is how the market quotes T-Bills. It uses a 360-day year and calculates the return based on the face value rather than the investment amount.

How to Calculate One Year Treasury Rates

The formulas used by our calculator are as follows:

Investment Yield = ((Face Value – Purchase Price) / Purchase Price) * (365 / Days to Maturity) * 100

Discount Rate = ((Face Value – Purchase Price) / Face Value) * (360 / Days to Maturity) * 100

Practical Example

Suppose you buy a 52-week (1 year) Treasury Bill with a Face Value of $10,000 for a Purchase Price of $9,550. The bill has 364 days to maturity.

1. Dollar Profit: $10,000 – $9,550 = $450
2. Investment Yield: ($450 / $9,550) * (365 / 364) * 100 = 4.72%
3. Discount Rate: ($450 / $10,000) * (360 / 364) * 100 = 4.45%

Why the 1-Year Rate Matters

The 1-year Treasury rate is a critical benchmark for the economy. It often influences interest rates for consumer loans, adjustable-rate mortgages, and savings accounts. Investors watch this rate closely as an indicator of market expectations for Federal Reserve policy and inflation over the coming twelve months.

function calculateTreasuryRate() { var faceValue = parseFloat(document.getElementById('faceValue').value); var purchasePrice = parseFloat(document.getElementById('purchasePrice').value); var days = parseFloat(document.getElementById('daysToMaturity').value); var resultsArea = document.getElementById('resultsArea'); var invYieldDisplay = document.getElementById('investmentYield'); var discRateDisplay = document.getElementById('discountRate'); var profitDisplay = document.getElementById('dollarProfit'); if (isNaN(faceValue) || isNaN(purchasePrice) || isNaN(days) || faceValue <= 0 || purchasePrice <= 0 || days = faceValue) { alert("Purchase price must be less than the face value for a discount T-Bill."); return; } // Calculation Logic var dollarProfit = faceValue – purchasePrice; // Investment Yield (Bond Equivalent Yield) formula var invYield = (dollarProfit / purchasePrice) * (365 / days) * 100; // Bank Discount Rate formula var discRate = (dollarProfit / faceValue) * (360 / days) * 100; // Display Results invYieldDisplay.innerHTML = invYield.toFixed(3) + "%"; discRateDisplay.innerHTML = discRate.toFixed(3) + "%"; profitDisplay.innerHTML = "$" + dollarProfit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2}); resultsArea.style.display = "block"; }