Which has the highest yield in April 2026: CDs, Treasuries, or HYSAs?

It depends on the term and your state tax situation. As of early April 2026, 6-month Treasuries are paying around 4.45%, top HYSAs around 4.30%, and 12-month CDs around 4.55%. After accounting for state tax exemption on Treasuries, they're often the winner for residents of high-tax states like California or New York.

Are Treasury bill interest payments really exempt from state tax?

Yes. Federal Treasury securities (bills, notes, and bonds) are exempt from state and local income tax. You still owe federal tax. For someone in California with a 9.3% state bracket, this exemption alone is worth roughly 35 to 45 basis points of additional yield.

Are HYSAs FDIC insured? What about CDs and Treasuries?

HYSAs and CDs from FDIC-member banks are insured up to $250,000 per depositor per bank. Treasury bills are not FDIC insured but are backed by the full faith and credit of the U.S. government, which is generally considered safer than FDIC.

What's the early withdrawal penalty on a CD?

Most banks charge 3 to 6 months of interest for CDs under 1 year, and 6 to 12 months for longer CDs. This effectively wipes out gains compared to a HYSA if you break it early. If there's any chance you'll need the money, stick with a HYSA or T-bills.

Should I lock in long-term CDs if rates are falling?

Maybe. If you genuinely won't touch the money for the term and the yield curve is inverted (short rates higher than long), it can make sense to lock in. But for emergency fund money, liquidity matters more than the last 25 basis points of yield. Don't lock cash you might need.

CD vs Treasury vs HYSA 2026: Where to Park Cash When Rate...

Cash management feels boring until you do the math. The difference between a 0.5% checking account and a 4.5% money market is roughly $400 per year on every $10,000 you keep liquid. In April 2026, with the Fed cutting rates from peak and short-term yields slowly drifting down, picking the right vehicle matters. I’ve moved cash between all three of these (HYSA, CDs, Treasuries) over the past two years and I’ll tell you what actually works for an emergency fund versus medium-term savings.

Quick April 2026 Snapshot

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Vehicle	Typical April 2026 Yield	Liquidity	State Tax
Top HYSA (Marcus, Ally, Discover)	4.20% to 4.35%	Same-day to 1-3 days	Taxable
4-week T-bill	4.40%	At maturity (4 weeks)	Federal only
13-week T-bill	4.45%	At maturity (3 months)	Federal only
26-week T-bill	4.45%	At maturity (6 months)	Federal only
12-month CD (online bank)	4.50% to 4.65%	At maturity, penalty if early	Taxable
Brokerage money market (SPAXX, VMFXX)	4.30% to 4.40%	Same-day	Partial state exemption

These are real numbers from early April 2026. They will move. Always check the actual current yield before deciding.

High-Yield Savings Account: The Default Choice

A HYSA is what most people should use for an emergency fund. Same-day access, FDIC insured, no penalties. The big online banks (Marcus, Ally, Discover, Capital One, SoFi) compete with each other and rates rarely diverge by more than 25 basis points.

Pros

Liquid: transfer to checking in 1 to 3 days
FDIC insured to $250,000 per depositor per bank
No minimum lockup
Multiple savings buckets (great for goal-based saving)

Cons

Yields move with the Fed — what you see today may not be what you get in 6 months
Interest is fully taxable at federal and state levels
Some banks have hidden inactivity penalties or transfer caps

Who it’s for: Emergency fund, sinking funds (vacation, car repair, etc.), and any cash you might need on short notice.

Treasury Bills: The Smart Choice for High Earners

T-bills are short-term U.S. government debt — anywhere from 4 weeks to 52 weeks. You buy at a discount and get face value at maturity. The difference is your interest.

The killer feature: Interest is exempt from state and local tax. If you live in a state with high income tax, this is a meaningful boost.

Real example: I live in California (9.3% state bracket). A T-bill paying 4.45% effectively yields about 4.45% to me, while a HYSA paying 4.30% yields only about 3.90% after state tax. That’s a 55 basis point gap on identical risk.

How to buy:

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TreasuryDirect: free, but the interface is from 1998 and the auction calendar takes some learning
Brokerage (Fidelity, Schwab, Vanguard): easier UX, supports auto-roll, free for Treasuries
ETFs (BIL, SGOV): simplest option, no maturity management, small expense ratio (~0.07%)

I use SGOV in my brokerage account. It’s a 0 to 3 month Treasury ETF that pays monthly distributions and tracks T-bill yields almost exactly. The 0.07% expense ratio is invisible.

Cons

Less liquid than HYSA — money is tied up until maturity (or you sell at market price)
Taxed as interest, not capital gains
Auctions happen on a fixed schedule, not on demand

Who it’s for: Anyone in a high-tax state with cash they don’t need for at least 4 weeks, and people in any state with cash they want federally insured at the strongest possible level.

Certificates of Deposit: Lock-In When Rates Are Falling

A CD is exactly what it sounds like — you give the bank your money for a fixed term in exchange for a guaranteed rate. Online banks routinely beat brick-and-mortar by 100 to 200 basis points.

When CDs make sense

You’re certain you won’t touch the money during the term
Rates are about to fall and you want to lock in (April 2026 may qualify)
You want a guaranteed rate, not a variable one that follows the Fed

When CDs do not make sense

Emergency fund money — early withdrawal penalty negates the benefit
Money for a known short-term goal (down payment in 6 months, etc.) — use a T-bill instead
Tax-advantaged accounts where you can already buy T-bills

The CD ladder strategy: Split your cash into 5 CDs of different lengths (e.g., 3, 6, 9, 12, 18 months). As each one matures, you decide whether to roll it forward at the new rate or pull it out. This gives you a balance of liquidity and rate-locking.

I personally don’t use CDs anymore because the CD ladder math is almost always beaten by SGOV plus a HYSA. The exception is if your bank has a promotional CD rate that’s clearly above market — those occasionally happen.

Brokerage Money Market Funds (SPAXX, VMFXX, SWVXX)

These are the underrated middle ground. They sit inside your brokerage account, hold a mix of T-bills and other government paper, and pay yields that closely track HYSAs.

Why they’re useful

Same-day liquidity for buying stocks (great for buying the dip)
Government money markets are partially state-tax exempt (typically 50% to 90% of distributions)
No minimum, no lockup

Why they’re not perfect

Not FDIC insured (but extremely safe in practice)
Yield is variable
Some have minimum balances or fund-specific quirks

I keep my “deployable cash” — money I might invest soon — in SPAXX inside my Fidelity brokerage. My emergency fund is in Marcus HYSA because I want it psychologically separated from investments.

After-Tax Yield: The Math That Actually Matters

Headline rates are misleading. What matters is what you keep after federal and state tax.

For a single filer in California making $200,000:

Federal bracket: 32%
State bracket: 9.3%
Combined effective on interest: ~38%

Vehicle	Headline	After-Tax
HYSA at 4.30%	4.30%	2.66%
T-bill at 4.45%	4.45%	3.03%
CD at 4.55%	4.55%	2.82%

The T-bill wins by 37 basis points after tax. On $50,000 of cash, that’s $185 per year. Not life-changing, but completely free.

My Setup

Here’s what I actually do, in case it helps you build your own.

Checking (3 weeks of expenses): Schwab Bank, no opinion, just convenient
Emergency fund (6 months of expenses): Marcus HYSA at the going rate
Sinking funds (vacation, car, gifts): Ally HYSA with named buckets
Deployable cash (down payment, brokerage idle): SGOV in Fidelity brokerage
Tax-advantaged cash: SPAXX in Fidelity Roth IRA, just sitting between investments

Every quarter I check the rates on Marcus and Ally and don’t move anything. The hassle of switching banks for 15 basis points isn’t worth it. The hassle of moving $30,000 from a HYSA to SGOV when the spread widened to 60 basis points absolutely was.

Bottom Line

Default: HYSA for emergency fund, money market fund for brokerage idle cash.

If you live in a high-tax state: SGOV or direct T-bills for anything beyond your 1-month immediate cash buffer.

If you’re absolutely sure you won’t need it: A 12-month CD or longer, locked in while rates are falling.

Don’t overthink this. The difference between the best and second-best option here is usually less than 50 basis points. Putting money in a HYSA today is 99% as good as the perfect optimization, and 1000% better than leaving it in a 0.05% checking account.