Where to keep cash in New York

Why Treasuries win in New York

Savings accounts, CDs and most money funds pay interest that New York taxes at up to 10.90%. Treasury bills don’t. So a Treasury bill paying 4.50% keeps what a fully taxable account paying 5.44% would, for a top-bracket New York resident. Today the best 1-year CD we track pays 4.65% and the best savings account 3.55%.

New York municipal money funds

These hold New York municipal debt, so their income is generally free of both federal and New York income tax (and the 3.8% surtax). Their yields are lower, so they win only at high brackets. For a top-bracket resident, one needs to yield at least 2.83% to beat a 1-year Treasury bill.

• Schwab New York Municipal Money Fund (SWYXX): 1.76% 7-day yield on October 26, 2026
• Fidelity New York Municipal Money Market Fund (FAWXX): check its current yield on the sponsor’s page

A small share of a state fund’s income can come from out-of-state or taxable sources; its yearly tax notice says how much.

New York taxes on cash, in brief

• Top income tax rate: 10.90%. 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 New York, except the share of a fund’s income that comes from U.S. Treasuries.
• New York lets you exclude a fund’s Treasury income only if the fund holds at least 50% U.S. government securities. Treasury-only funds qualify; many government funds don’t.
• Some New York cities or counties also levy a local income tax. Where it covers interest, Treasuries are exempt from it too, which widens their edge.

Questions

Is Treasury bill interest taxed in New York?

No. Interest on U.S. Treasury bills, notes and bonds is exempt from state and local income tax under federal law, so New York doesn’t tax it. It is still subject to federal income tax. Interest from savings accounts and CDs is taxed by New York at up to 10.90%.

Where should I keep cash in New York?

At New York’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 New York?

At New York’s top rate and 37% federal, a CD or savings account needs at least 5.44% to keep as much as a 1-year Treasury bill paying 4.50%.

Is a New York municipal money fund worth it?

Income from a New York municipal money fund is generally free of federal and New York income tax. To beat a 1-year Treasury bill at 4.50% for a top-bracket New York resident, it needs to yield at least 2.83%. SWYXX yielded 1.76% (7-day yield, October 26, 2026).

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 →