Updated October 27, 2026 from live rates

Where to keep cash in Minnesota

Minnesota’s top income tax rate is 9.85%. At that rate and 37% federal, a 1-year Treasury bill at 4.50% keeps the most: about $7,088 a year on $250,000 after tax, versus $13 in a default brokerage sweep. A CD or savings account would need to pay 5.33% to keep as much as a 1-year Treasury bill at 4.50%.

Option

Rate

Kept a year on $250,000

1-year Treasury bill

4.50%

$7,088

3-month Treasury bill

4.22%

$6,647

CFG Bank 1-year CD

4.65%

$6,179

Treasury-only money fund

3.79%

$5,969

Marcus by Goldman Sachs 11-month No-Penalty CD

4.00%

$5,315

Wealthfront Cash Account

3.55%

$4,717

Municipal money fund (not your state's)

1.45%

$3,268

Merrill Edge

0.01%

$13

Why Treasuries win in Minnesota

Savings accounts, CDs and most money funds pay interest that Minnesota taxes at up to 9.85%. Treasury bills don’t. So a Treasury bill paying 4.50% keeps what a fully taxable account paying 5.33% would, for a top-bracket Minnesota resident. Today the best 1-year CD we track pays 4.65% and the best savings account 3.55%.

Municipal money funds in Minnesota

We don’t list a money fund that holds only Minnesota municipal debt. A national municipal fund is free of federal tax but generally taxed by Minnesota; for a top-bracket resident it needs at least 3.14% to beat a 1-year Treasury bill.

Minnesota taxes on cash, in brief

Top income tax rate: 9.85%. Your own rate may be lower; change it above.
Interest on U.S. Treasury bills, notes and bonds: exempt from state and local income tax, taxed federally.
Savings accounts, CDs and prime or government money funds: taxed by Minnesota, except the share of a fund’s income that comes from U.S. Treasuries.

Questions

Is Treasury bill interest taxed in Minnesota?

No. Interest on U.S. Treasury bills, notes and bonds is exempt from state and local income tax under federal law, so Minnesota doesn’t tax it. It is still subject to federal income tax. Interest from savings accounts and CDs is taxed by Minnesota at up to 9.85%.

Where should I keep cash in Minnesota?

At Minnesota’s top rate and 37% federal, a 1-year Treasury bill keeps the most after tax today (4.50%). The answer depends on your brackets; the calculator on this page updates for yours.

What rate does a CD need to beat Treasury bills in Minnesota?

At Minnesota’s top rate and 37% federal, a CD or savings account needs at least 5.33% to keep as much as a 1-year Treasury bill paying 4.50%.

Rates: each provider’s own page and the U.S. Treasury, October 27, 2026. State rates: Tax Foundation, 2026 (top single-filer rate; local taxes not included). General information, not tax advice. Other states →