High-Yield Savings Accounts vs. Treasury Bills vs. Smart Portfolios: What’s the Best Cash Move Now?

Many people leave their cash in checking accounts without a second thought. Yet, with inflation near 3 percent, that money may lose purchasing power. 

Today’s high-yield savings accounts offer annual percentage yields (APYs) close to 5 percent. This could potentially earn hundreds more each year compared to a typical checking account. Treasury bills (T-bills) may deliver similar yields through short-term auctions, and smart cash tools from robo-advisors or brokerages may automatically shift funds to top rates. 

In this article, we’ll compare high-yield accounts, T-bills, and smart portfolios—highlighting how each works, what to expect, and which might be right for your goals based on your timeline, risk tolerance and need for easy access.

📌 Also Read: Recurring Contributions & Automated Investing Explained

Top High-Yield Savings Accounts

High-yield savings accounts may help you earn more on your idle cash without giving up easy access or FDIC protection. The interest is taxed as ordinary income, but these accounts may still help you grow your savings more efficiently than a regular checking account. 

Here’s what to know before getting started:

What to Expect in Rates & Fees

✅ Most online banks advertise APYs between 4.30 percent and 5.00 percent for balances under $250,000.

✅ Typical minimum opening deposit is $0 to $1,000.

✅ No monthly fees in most cases if you meet balance or activity requirements
✅ Withdrawal limits: You may be limited to six per month for online transfers
✅ Tiered rates: Some accounts may pay slightly more on higher balances

Rates can change at any time, so it’s a good idea to check how often the bank updates its rates and terms.

How to Open & Fund One Quickly

📝 Note: Any interest you earn is typically reported to you on a 1099-INT and must be included on your federal tax return, usually on Form 1040 and, if required, Schedule B.

✏️ Hypothetical Example:

Sarah keeps $15,000 in a checking account that earns little to no interest. She decides to move that money into a high-yield savings account offering a 4.80 percent APY.

After one year, assuming she doesn’t make any withdrawals, her savings could grow by around $720 in interest.

Since interest is considered ordinary income, Sarah will receive a 1099-INT from her bank during tax season and must report the $720 on her federal return.

Treasury Bills — Easy & Safe Cash Parking

If you’re looking for a place to keep cash with minimal risk, Treasury bills (T-Bills) might be worth considering. These are short-term loans to the U.S. government, typically between 4 to 52 weeks. Instead of earning monthly interest, you buy them at a discount—say, for $970—and get the full $1,000 back at maturity. That difference is your earnings.

T-Bills are considered low risk because they’re backed by the U.S. Treasury. And while the interest is subject to federal tax, it’s generally exempt from state and local income taxes.

Buying T-Bills in Minutes

You may purchase T-Bills online through TreasuryDirect or most brokerage accounts in just a few steps:

Step 1: Open a TreasuryDirect account or sign in to your brokerage

Step 2: Select “Buy Direct” (TreasuryDirect) or go to your broker’s “Fixed Income” section

Step 3: Choose “Treasury Bill,” enter at least $100, then submit a non-competitive bid

Step 4: Link your bank account for payment; funds are withdrawn on the issue date

Laddering for Steady Access

If you want regular access to your cash, you could build a T-Bill ladder. This means spreading your investment across different terms — like 4, 13, 26, and 52 weeks.

✅ It helps you avoid locking up all your money at once
✅ You’ll have a portion maturing every few months
✅ When one matures, you can reinvest it at the longest term in your ladder

This method may offer more flexibility than putting all your cash in one maturity and it keeps a steady stream of money available if you need it.

✏️ Hypothetical Example
Let’s say you buy a 26-week Treasury bill for $9,800. When it matures in about six months, you get $10,000 back. That $200 difference is your earnings. It’s treated as ordinary income for federal tax purposes, but you generally don’t pay state or local taxes on it.

📝 Note: This type of setup might work well if you want to earn a bit more on your idle cash without locking it up for too long.

Smart Portfolios

Smart portfolios take the guesswork out of rate-chasing by automatically moving your uninvested cash into higher-yield vehicles. They help you earn more while keeping your money ready when you need it.

They generally bundle two core tools:

✅ Sweep Programs – Automatically move uninvested cash each business day into higher-yield vehicles (like money market funds or bank deposit programs).
✅ Cash-Management Accounts (CMAs) – Hybrid accounts at brokerages or robo-advisors that offer checking-style access plus yield that tracks short-term rates.

These tools work together to capture daily rate changes and ensure your cash is parked in the top available option. Interest is typically taxed as ordinary income, so you’ll receive a Form 1099-INT each year for reporting.

To use smart portfolios, you generally need:

Once set up, the system handles transfers automatically—sweeping cash out at day’s end and pulling it back in when you place trades or request withdrawals. This can help you earn yields close to those of short-term Treasury bills or high-yield savings, without constant account hopping.

Side-By-Side: Returns, Risk & Access

In most cases, high-yield savings accounts and three-month T-bills deliver similar returns, with T-bills generally edging out savings by a few basis points. Smart cash portfolios may offer slightly lower blended yields after fees but typically automate transfers and improve access.

Below is a quick side-by-side comparison of their key trade-offs:

Feature	High-Yield Savings Accounts	3-Month Treasury Bills	Smart Cash Portfolios
Yield (APY)	4.15 – 4.66 percent, depending on bank	~4.24 percent at last auction; subject to change each cycle	3.70 – 4.00 percent blended rate after fees
Minimum to Open	$0 – $5,000 (many top banks: $0 – $100; some require $500–$5,000)	$100 via TreasuryDirect; brokers may set higher secondary-market minimums	$0 – $10 to start, depending on platform
Liquidity	Next-day ACH transfers typical	Cash only at maturity unless sold on secondary market (price/fee risk)	Unlimited withdrawals, usually 1–2 business-day settlement
Insurance/Guarantee	FDIC up to $250,000 per depositor, per bank	Backed by full faith and credit of U.S. government	FDIC up to $2,000,000 via program banks
Pros	✅ FDIC insured ✅ easy online set-up	✅ virtually risk-free yield ✅ no purchase fees via TreasuryDirect	✅ higher APY than many sweeps ✅ auto-sweep feature
Cons	❌ APY can drop anytime ❌ transfer limits may apply	❌ illiquid before maturity ❌ must navigate auctions or broker platforms	❌ requires brokerage or robo-advisor relationship ❌ no ATM/debit access

📝 Disclaimer: Yields, minimums and terms are approximate ranges gathered from publicly available data as of May 2025. These figures may vary by provider and are subject to change without notice. Always verify current rates, fees and requirements with your bank or brokerage before making any decisions.

Choosing & Setting Up Your Cash Strategy

There’s no one-size-fits-all answer when it comes to where you should keep your cash. What works best usually depends on how soon you’ll need the money and how much effort you’re willing to put into managing it.

Here’s a quick way to think about it:

✅ Need access soon? High-yield savings accounts may work well for short-term spending or emergency funds.
✅ Won’t need the money for a few months? Treasury bills could be a solid option if you’re comfortable waiting until they mature.
✅ Prefer a hands-off setup? Smart portfolios or cash sweep accounts may help automate rate shopping and keep things simple.

You don’t have to pick just one. Some people split their cash across different tools—keeping some money easily accessible, and putting the rest to work with higher yields. Even small changes can add up over time.

📌 Also Read:

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The Carry Learning Center is operated by The Vibes Company Inc. (“Vibes”) and contains generalized educational content about personal finance topics. While Vibes provides educational content and technology services, all investment advisory services discussed on this website are provided exclusively through its wholly-owned subsidiary, Carry Advisors LLC (“Carry Advisors”), an SEC registered investment adviser. The information contained on the Carry Learning Center should not be construed as personalized investment advice and should not be considered as a solicitation to buy or sell any security or engage in a particular investment, accounting, tax or legal strategy. Vibes is not providing tax, legal, accounting, or investment advice. You should consult with qualified tax, legal, accounting, and investment professionals regarding your specific situation.

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