Utah · Retirement Income · Cash & Savings
Where Should Utah Retirees Keep Cash? CDs vs T-Bills (2026)
Savings accounts, CDs, money market funds, Treasury bills and I bonds compared on October 2026 rates, Utah taxes, insurance limits and how quickly you can get your money back.
The bottom line
- The FDIC's national averages published October 19, 2026: 0.38% for savings, 0.63% for money market deposit accounts and 1.76% for a 12-month CD.
- On October 16, 2026, a 52-week Treasury bill yielded 4.44% and a 13-week bill 4.18%. Consumer prices were up 3.7% over the year to September 2026, so the average savings account lost ground to inflation.
- Treasury interest is exempt from Utah's 4.5% income tax (TC-40A code 71). Bank interest is not. A CD would need about 4.65% to match a 4.44% T-bill after Utah tax.
- On $50,000 held for a year, the gap between the average savings account and a 52-week bill is about $2,039 after Utah tax.
- Bank and credit union deposits are insured to $250,000 per depositor, per institution, per ownership category. Money market funds, T-bills and annuities are not FDIC-insured.
Most Utah retirees keep their cash in more than one place. Money you may need this month belongs in an insured checking or savings account. Money for the next one to two years of spending can earn noticeably more in CDs or short-term Treasury bills, and Treasury interest is exempt from Utah income tax. The right mix depends on when you will need the money and how much of it is above deposit-insurance limits.
What are savings accounts and CDs paying right now?
The FDIC publishes national average deposit rates every month. The averages released October 19, 2026, based on rates at the end of September, show how little a typical account pays. They cover rates across many institutions, so they are pulled down by large banks that pay very little on savings. Online banks and many credit unions pay more, which is why comparing rates is worth the time.
| Account type | National average rate | Interest on $50,000 for one year |
|---|---|---|
| Interest checking | 0.07% | $35 |
| Savings | 0.38% | $190 |
| Money market deposit account | 0.63% | $315 |
| 3-month CD | 1.14% | — |
| 6-month CD | 1.39% | — |
| 12-month CD | 1.76% | $880 |
| 24-month CD | 1.55% | — |
| 36-month CD | 1.39% | — |
| 60-month CD | 1.41% | — |
Source: FDIC, National Rates and Rate Caps, published October 19, 2026 — fdic.gov/national-rates-and-rate-caps. Savings and checking rates are for the $2,500 tier; money market and CD rates average the $10,000 and $100,000 tiers. Interest is our simple-interest arithmetic before taxes.
Notice that longer CDs average less than the 12-month CD. Banks are not paying extra to lock money up for five years right now, so a long CD mostly adds an early-withdrawal penalty without adding yield.
What do Treasury bills pay?
Treasury bills are short-term loans to the U.S. government, sold for 4 to 52 weeks. You buy them at a discount and get the full face value at maturity; the difference is your interest. TreasuryDirect sells them in $100 increments, and most brokerage accounts sell them too. On October 16, 2026, the Treasury listed these yields:
Coupon-equivalent yields, October 16, 2026. Source: U.S. Department of the Treasury, Daily Treasury Bill Rates — home.treasury.gov; TreasuryDirect, Treasury Bills ($100 minimum, terms of 4 to 52 weeks) — treasurydirect.gov.
Longer Treasuries paid a little more: 4.74% for a 2-year note and 4.89% for a 5-year note on the same day. Notes pay interest every six months, and their price moves with rates if you sell before maturity. If you hold one to maturity, you get the face value back.
Bank rates: FDIC national averages, published October 19, 2026. T-bills: U.S. Treasury, October 16, 2026. I bond: TreasuryDirect composite rate for bonds issued May 1 to October 31, 2026. Rates are before taxes.
Why does Utah's tax treatment matter?
Because Utah exempts Treasury interest and taxes bank interest. Utah State Tax Commission Publication 33 lists interest on U.S. Treasury bills, notes, bonds and savings bonds, including E, EE and I bonds, as exempt from Utah individual income tax. You claim it as a subtraction on form TC-40A, Part 2, using code 71. Interest from bank savings accounts, CDs and money market deposit accounts is taxed at Utah's flat 4.5% rate, the rate the Tax Commission lists as current. Interest on Fannie Mae and Ginnie Mae securities is not exempt, and the Tax Commission says all of these subtractions are subject to audit, so keep your 1099-INT forms.
Both kinds of interest are taxed by the IRS the same way, so the Utah exemption is the difference. To match a 4.44% Treasury bill after Utah tax, a bank CD would need to pay about 4.65%, by our arithmetic.
Sources: Utah State Tax Commission, Publication 33, Interest from U.S. Government Obligations — files.tax.utah.gov/tax/forms/pubs/pub-33.pdf; Utah State Tax Commission, income tax rates — incometax.utah.gov/paying/tax-rates.
One caution for higher-income retirees: Treasury interest is still in your federal adjusted gross income, so it still counts toward the income Social Security uses to set Medicare IRMAA surcharges two years later. Moving cash from a bank to T-bills changes your Utah tax, not your IRMAA picture. Our IRMAA guide has the 2026 brackets.
How much more would a Utah couple earn?
Take a retired couple in Logan who keep $50,000 of cash for the year ahead. The table shows the interest they would earn in one year at each rate above, after Utah's 4.5% income tax. Federal tax applies to all of it and is left out to keep the comparison clean.
| Where the $50,000 sits | Rate | Interest before tax | Utah tax? | Interest after Utah tax |
|---|---|---|---|---|
| Savings account (national avg.) | 0.38% | $190 | 4.5% | $181 |
| Money market deposit account (national avg.) | 0.63% | $315 | 4.5% | $301 |
| 12-month CD (national avg.) | 1.76% | $880 | 4.5% | $840 |
| 26-week Treasury bill | 4.35% | $2,175 | Exempt | $2,175 |
| 52-week Treasury bill | 4.44% | $2,220 | Exempt | $2,220 |
Illustrative only. Simple interest for one year at the rates published by the FDIC (October 19, 2026) and Treasury (October 16, 2026); a 26-week bill assumes you reinvest at the same rate for a second 26 weeks, which is not guaranteed. Our arithmetic; not a projection.
The difference between the average savings account and the 52-week bill is about $2,039 a year on $50,000. That is more than 7 times the 2026 Part B deductible of $283. It also matters against inflation: at 3.7% inflation, money earning 0.38% loses about 3.4% of its buying power in a year.
Inflation: BLS Consumer Price Index for All Urban Consumers, U.S. city average, all items (CUUR0000SA0), September 2026 vs. September 2025 — data.bls.gov/timeseries/CUUR0000SA0.
How safe is each option?
"Safe" means different things for each. Here is what protects your money in each place:
| Option | What protects it | Getting your money out | Utah income tax on interest |
|---|---|---|---|
| Bank savings, checking, money market deposit account | FDIC insurance to $250,000 per depositor, per bank, per ownership category | Any time | Taxed |
| Credit union share accounts | NCUA share insurance to $250,000 | Any time | Taxed |
| Bank or credit union CD | FDIC or NCUA insurance, same limits | At maturity; early withdrawal penalty before | Taxed |
| Treasury bills and notes | Backed by the U.S. government; not FDIC-insured | At maturity, or sell earlier at market price | Exempt |
| I bonds | Backed by the U.S. government | Not before 12 months; lose 3 months' interest if cashed before 5 years | Exempt |
| Money market mutual fund | Not FDIC-insured; can lose value. SIPC covers a broker's failure, not investment losses | Usually any business day | Depends on what the fund holds |
| Fixed annuity (MYGA) | The insurance company's claims-paying ability; not FDIC-insured | At end of term; surrender charges before | Tax-deferred until withdrawn, then taxed |
Sources: FDIC, Understanding Deposit Insurance — fdic.gov; NCUA, Share Insurance Coverage — ncua.gov; SEC, Money Market Funds: Investor Bulletin — investor.gov; SEC, Cash Sweep Programs investor bulletin — investor.gov; TreasuryDirect, I bonds — treasurydirect.gov.
Two Utah-specific notes. First, the FDIC limit applies per bank, not per branch or app. Utah is home to 44 FDIC-insured institutions holding about $1.05 trillion in deposits as of June 30, 2026, about 5.1% of all U.S. bank deposits and the fifth-largest total of any state, according to FDIC data. Many are online banks serving customers nationwide, so a Utahn with accounts at several "different" online brands should check which ones are actually separate banks. Second, if you hold more than $250,000 in one ownership category at one bank, the amount above the limit is uninsured.
Source: FDIC BankFind Suite, active FDIC-insured institutions by headquarters state, deposits as of June 30, 2026 — banks.data.fdic.gov. Utah: 44 of 4,219 institutions nationwide. Share and rank are our arithmetic on the FDIC API.
What about I bonds?
I bonds bought from May 1 through October 31, 2026 earn 4.26% for their first six months, made up of a fixed rate of 0.90% that lasts for the life of the bond plus an inflation rate that resets every six months. TreasuryDirect announces the next rate on November 1. I bonds are exempt from Utah tax, but you cannot cash them for 12 months, and you give up the last three months of interest if you cash them before five years. That makes them a poor fit for cash you may need soon and a reasonable fit for an inflation-protected reserve you won't touch for a while. Purchases are limited to $10,000 per person per calendar year in electronic bonds.
Source: TreasuryDirect, I bond interest rates — treasurydirect.gov; I bonds overview — treasurydirect.gov.
How should a Utah retiree organize cash?
Many planners describe cash in tiers by when you will need it. One way to set it up:
- This month's money: checking. Keep about one month of spending in an insured checking account so bills and automatic Medicare premium payments clear.
- Emergency money: high-yield savings or a money market deposit account. A few months of spending plus a health reserve. Compare the rate with the 0.38% national average; if yours is close to that, you are probably leaving interest on the table.
- Next one to two years: a ladder. Split the money you will spend over the next year or two across T-bills or CDs that mature in 3, 6, 9 and 12 months. As each one matures, spend it or roll it forward. For Utah taxpayers, compare CDs with T-bills after the 4.5% Utah tax.
- Check insurance limits. Keep insured deposits under $250,000 per ownership category per bank, or spread larger balances across separate institutions or ownership categories.
- Don't over-hold cash. Money you won't need for years is exposed to inflation. A pension, Social Security and, for some households, an annuity can cover fixed bills so the cash pile doesn't have to be huge. Our lifetime income guide covers those options.
If you are weighing a multi-year guaranteed annuity (MYGA) against a CD, know that it is an insurance contract, not a deposit: it is not FDIC-insured, interest grows tax-deferred, and surrender charges apply if you leave early. Our fixed annuity guide explains the trade-offs.
Bring your account statements, your Social Security estimate and your 2027 Medicare plan notice. We'll map how much cash your plan needs, when you'll need it and where your income comes from, in plain English and with no pressure. Education, not advice. We do not offer every plan available in your area. By calling or texting, you agree we may contact you at the number you provide; reply STOP to opt out.
Talk to a planner →Frequently asked questions
What is the average savings and CD rate in October 2026?
The FDIC's national averages published October 19, 2026 were 0.38% for savings accounts, 0.63% for money market deposit accounts, 1.76% for a 12-month CD and 1.41% for a 60-month CD. They are averages across institutions, so many banks and credit unions pay more and some pay less. The FDIC publishes new averages on the third Monday of each month.
Is Treasury bill interest taxed in Utah?
No. Utah lets you subtract interest on U.S. Treasury bills, notes, bonds and savings bonds, including I bonds, on form TC-40A, Part 2, code 71, according to Utah State Tax Commission Publication 33. The interest is still taxed by the IRS. Interest from bank savings accounts, CDs and money market deposit accounts is taxed by both, at Utah's 4.5% rate on the state side.
What did Treasury bills pay in October 2026?
On October 16, 2026, the U.S. Treasury listed coupon-equivalent yields of 4.02% for 4-week bills, 4.18% for 13-week bills, 4.35% for 26-week bills and 4.44% for 52-week bills. Yields change daily and at each auction. You can buy bills at TreasuryDirect in $100 increments or through a brokerage account.
How much cash should a retiree keep?
There is no single rule. Many retirees hold enough to cover their gap between guaranteed income and spending for one to two years, plus a reserve for health costs such as the Part B deductible ($283 in 2026) and the Part D out-of-pocket cap ($2,400 in 2027) or a Medicare Advantage plan's out-of-pocket maximum. The right amount depends on your income, other savings and how much market risk you can live with.
Is my money safe at an online bank based in Utah?
Deposits at an FDIC-insured bank are insured up to $250,000 per depositor, per bank, per ownership category, wherever the bank is headquartered. Utah is home to 44 FDIC-insured institutions holding about $1.05 trillion in deposits as of June 30, 2026, many of them online banks that serve customers nationwide. Credit union accounts are insured to $250,000 by the NCUA. Money market funds, Treasury bills and annuities are not FDIC-insured.
Sources
- FDIC — National Rates and Rate Caps, published October 19, 2026: fdic.gov/national-rates-and-rate-caps
- FDIC — Understanding Deposit Insurance: fdic.gov/resources/deposit-insurance/understanding-deposit-insurance
- FDIC — BankFind Suite (institutions and deposits by state, June 30, 2026): banks.data.fdic.gov/bankfind-suite/bankfind
- U.S. Department of the Treasury — Daily Treasury Bill Rates and Par Yield Curve Rates, October 16, 2026: home.treasury.gov
- TreasuryDirect — Treasury Bills: treasurydirect.gov/marketable-securities/treasury-bills
- TreasuryDirect — I bond interest rates: treasurydirect.gov/savings-bonds/i-bonds/i-bonds-interest-rates
- U.S. Bureau of Labor Statistics — CPI-U, U.S. city average, all items (CUUR0000SA0): data.bls.gov/timeseries/CUUR0000SA0
- Utah State Tax Commission — Publication 33, Interest from U.S. Government Obligations: files.tax.utah.gov/tax/forms/pubs/pub-33.pdf
- Utah State Tax Commission — Income tax rates: incometax.utah.gov/paying/tax-rates
- NCUA — Share Insurance Coverage: ncua.gov/consumers/share-insurance-coverage
- SEC — Money Market Funds: Investor Bulletin: investor.gov
- CMS — 2027 Medicare Advantage and Part D Rate Announcement (Part D out-of-pocket threshold $2,400): cms.gov
- CMS — 2026 Medicare Parts A & B Premiums and Deductibles: cms.gov
About this article. Written by the Utah Retirement Income Data Desk and reviewed by Brian Penner, Retirement income & long-term care planner. Educational only — not financial, tax, investment, or legal advice. Rates are national averages and market yields on the dates shown and change daily; they are not offers from any bank or from us, and past rates do not predict future rates. Examples are illustrative, use our own arithmetic, and are not projections of any household's results. Check tax questions with a tax professional or the Utah State Tax Commission. Utah Retirement Income is a licensed independent insurance agency (NPN 16493717) and is not a government agency; we are not connected with or endorsed by the FDIC, the U.S. Treasury, the Utah State Tax Commission, the Social Security Administration, Medicare, the Centers for Medicare & Medicaid Services, or any government program, and we do not sell bank deposits or securities. We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area; please contact Medicare.gov, 1-800-MEDICARE, or your State Health Insurance Assistance Program — in Utah, the Utah SHIP — to get information on all of your options. A $0-premium plan is not free; you still pay Part B premiums and cost-sharing. Annuity guarantees are subject to the claims-paying ability of the issuing company and are not FDIC-insured; there are no guaranteed investment returns and no promise of savings. If you call or text us, you consent to be contacted at the number you provide about your options; message and data rates may apply, and you can opt out at any time by replying STOP.