SGOV vs T-Bills vs HYSA: Which Should You Pick?
Where to park cash? SGOV, direct T-bills, and a high-yield savings account compared on after-tax yield, liquidity, and state-tax treatment, with a cash optimizer.
For cash you want safe and liquid, three options dominate: the SGOV Treasury ETF, buying T-bills directly, and a high-yield savings account. They look similar on the headline rate and diverge once you account for state tax and how you actually access the money.
Quick answer
For most taxable cash, SGOV is the clean default: a Treasury ETF you can trade intraday (sale proceeds become withdrawable after T+1 settlement), with interest that is mostly exempt from state tax. Direct T-bills can yield a touch more if you hold to maturity and tolerate the clunkier mechanics. A high-yield savings account wins on simplicity and FDIC insurance but is fully taxable, so its after-tax yield trails in high-tax states. If you live in California or New York and are a high earner, a muni money market can beat all three after tax.
| SGOV | Direct T-bills | HYSA | |
|---|---|---|---|
| Yield | See live figures | See live figures | Whatever your bank pays |
| State tax | Exempt (Treasury source) | Exempt (Treasury source) | Fully taxable |
| Interest-rate risk | Minimal (~0.09 yr duration) | None if held to maturity | None |
| Liquidity | Intraday ETF trade; settles T+1 | At maturity, or sell via broker | Instant transfer |
| FDIC insured | No (U.S. government backed) | No (U.S. government backed) | Yes, to $250k/bank |
| Mechanics | Buy like any ETF | TreasuryDirect or broker | Open an account |
| Best role | Core reserve (2-6 months) | Matched-maturity spending | Immediate bills |
Yields move with the short-term rate, so this table does not quote them. Current figures are on the cash yields page, refreshed daily. State-tax treatment assumes Treasury-source interest is state-exempt.
Compare after-tax, in your bracket
The headline yield is not what you keep. This optimizer converts each option to an after-tax yield for your federal and state brackets, which is where the state-tax exemption on Treasuries and the muni advantage in high-tax states actually show up.
Cash Reserve Optimizer
About You
Tax Rates
0% (WA/TX/FL), 5% (CO), 9.3% (CA), 10.9% (NY)
Current Yields
Share of SGOV income exempt from state tax. iShares reported 95.14% for 2025; direct T-bills are 100%. Updates annually.
Set each rate to what you can actually get. Cash yields move with the Fed, and a rate from a few months ago can be off by a full percentage point.
$40.0K
3 base + 1 tech field + 1 RSU/bonus = 5 months
Layered Allocation
$8,000
1 month in HYSA/checking
$24.0K
3 months in SGOV/T-bills
$8,000
1 months in SGOV
After-Tax Yield Comparison
| Vehicle | Stated | After-Tax | Annual Income | Fit |
|---|---|---|---|---|
| HYSA | 3.40% | 2.31% | $925 | Immediate |
| SGOV / T-Bills | 3.55% | 2.41% | $966 | Core |
| Muni MMF | 2.35% | 2.35% | $940 | If high state tax |
SGOV saves you $33/yr vs. HYSA on $32.0K of reserves (state tax exemption).
Track your emergency fund coverage on Summitward's dashboard.
Who should pick which
SGOV
Best all-around default for taxable cash: mostly state-tax-exempt, tradable intraday (proceeds settle T+1), Treasury-backed.
Direct T-bills
A bit more yield for known spending dates, if you will hold to maturity and accept the extra steps.
HYSA
Simplicity and FDIC insurance for immediate bills; weakest after tax in high-tax states.
The full reasoning
For the three-layer cash structure, the muni and I-bond options, and how big a reserve to hold, read Where to Park Your Cash: A High Earner’s Guide to SGOV, T-Bills, HYSAs, and Munis. Fidelity investors deciding between the default core position and SGOV should read SPAXX vs. SGOV.
Want to see how this fits your whole portfolio?
Summitward turns portfolio, tax, and life-planning tradeoffs into decisions you can act on, including overlap, concentration, and tax-location analysis across your accounts.