Free primer: I bonds vs T-bills vs HYSA. Calculator: after-tax at your horizon. Paid steps assume you already know I-bonds are not an emergency fund, and you want a Tuesday-through-five-year file, not a rate screenshot.
Do this in order
Split the pile into three labeled buckets before you open a tab. Tuesday money (job-loss, deductible, car repair) stays HYSA. Dated money (property tax, insurance, tuition, a closing) gets a maturity. One-to-five-year sleeve is the only pile that may even look at I-bonds. If you cannot name the date or the job, it is Tuesday money. The emergency-fund guide sizes bucket one; this playbook refuses to raid it.
Write this year’s I-bond cap already used. TreasuryDirect → Current Holdings. $10,000 electronic per SSN per calendar year (31 CFR 363.52). A spouse is a second $10,000, not a rumor. Paper via Form 8888 ended January 1, 2025 — do not plan a refund election. Gifts you deliver this year count against the recipient, not you. If the sleeve is $25,000, only $10,000 is an I-bond decision. The rest is T-bills or HYSA. The calculator splits it; you still have to buy it that way.
Open or unstick TreasuryDirect before the money is “ready.” SSN, U.S. bank for ACH, identity check. New accounts are not same-hour. A bank change can sit. Do this on a quiet Wednesday, not the afternoon you decided rates looked nice. Brokerage T-bills (Treasury or a Treasury-only fund) are the fallback if Direct is still verifying and the dated pile has a clock.
Type live numbers into the calculator. Do not use our defaults. Composite: TreasuryDirect I-bond rate page, the issue window you will actually buy. HYSA APY: the app, not a ranking site from March. T-bill discount: the high rate on the tenor you will bid, from TreasuryDirect or your broker’s auction screen. Label in the tool says “example, not today’s auction” because a frozen 4.10% is how people buy last quarter’s trade.
Toggle state tax on if you pay state income tax. That box is the T-bill vs HYSA fork in CA, NY, NJ, MN, OR. Treasury interest is state-exempt (31 U.S.C. § 3124); HYSA interest is not. A 0% state can still prefer T-bills for a known date, but the after-tax gap shrinks to liquidity and whether you will roll. If you typed 5% and left the box off, you modeled Florida by accident.
Anything needed inside 12 months is HYSA or a T-bill that matures then. I-bonds will not redeem. Do not “put a little in I-bonds in case.” A 9-month closing fund in I-bonds is how people wire a HELOC. Match T-bill tenor to the date (4 / 8 / 13 / 17 / 26 / 52 week). A 52-week bill for an April tax bill is the wrong product. Secondary-market sales are allowed — they are not a HYSA.
At 12–60 months, run the calculator with the 3-month penalty on. Cashing I-bonds before five years forfeits the last three months of interest. On the worked $10,000 / 24-month / 5% state slice, example rates make T-bills win (~$10,684 vs ~$10,597 I-bond vs ~$10,596 HYSA). I-bonds are allowed to lose a 24-month yield race. They exist for the inflation reset and the five-year+ hold. If the only reason you want I-bonds is “4.26% looks higher than 4.00%,” you wanted T-bills or the HYSA.
Buy I-bonds early in the calendar if this year’s cap is the plan. December 31 is not a checkout extension. Identity problems in the last week of the year are how people miss the cap and then invent a January story. If you already hit $10,000, stop. Overflow is a T-bill / HYSA problem, not a “gift to myself and deliver next year” scheme unless you actually understand the delivery-year cap.
Ladder T-bills to dates, not to a vibe. One 52-week blob that you roll forever is a HYSA with extra 1099s. Three or four maturities that hit tax, insurance, and a known tuition bill is the product. Noncompetitive bid at the auction, $100 minimum in $100 steps through TreasuryDirect for bills (brokerage may differ). When a bill matures, decide again — do not auto-roll a dated pile into a new 52-week just because the screen offered it.
Put the tax lot on the calendar the day you buy. HYSA: 1099-INT every January, federal and state. T-bill: ordinary federal interest in the year of maturity, state exempt — subtract it on the state return so AGI-based states do not tax it by inertia. I-bond: you may defer federal until redemption; the year you cash can stack with wages, Roth conversions, or a home sale. If a big redemption year is already crowded, stagger cash-ins or elect annual reporting while the amounts are small. Education exclusion is Publication 970 tests, not a feeling.
Revisit on May 1 and November 1, not on every blog post. Those are the I-bond reprint dates. A new composite does not require a sale; it changes what the next six months pay. A HYSA cut of 50 bp is a bank-hop only if the new bank is actually FDIC, the transfer is done, and Tuesday money stays available during the hop. Chasing 10 bp across three banks is how emergency funds spend a week in limbo.
Hard-stop list: I-bonds as the emergency fund, Form 8888 paper add-on folklore, skipping the 401(k) match to fill a 4% sleeve, treating the calculator’s example 4.26 / 4.00 / 4.10 as live prints, buying I-bonds in month 11 of a house hunt, parking more than $10,000 in one SSN’s I-bonds and hoping Treasury will not reverse the excess, and a 52-week T-bill for rent due Friday. If bucket one is thin, you wanted the HYSA, not a composite.
One-page decision
Tuesday money: HYSA, sized, no lock. Dated money: T-bill (or CD) that matures on the date, especially in a high-tax state. Inflation sleeve you can leave past a year, and past five if you want to skip the penalty: I-bonds up to this year’s $10,000, early in the calendar, composite typed from TreasuryDirect. Overflow is not an I-bond. Match first. Nobody is required to own savings bonds.