T-bill ETFs in 2026 remain a competitive place for cash, though the return has come down. The iShares 0-3 Month Treasury Bond ETF (SGOV) had a 30-day SEC yield of 3.54% on June 30, 2026, and the 3-month Treasury bill yielded 3.80% on August 25, 2026, against an effective federal funds rate of 3.63% [1][3][5]. That compares with 4.24% earned by SGOV in calendar 2025 and 5.28% in 2024 [1]. The case for cash-like holdings is no longer the yield alone; it is the combination of a yield close to the policy rate, near-zero price risk and daily liquidity while longer bonds swing with the curve.
T-bill ETFs in 2026: SGOV and BIL yields
SGOV holds Treasury bills maturing within three months. On June 30, 2026 its weighted average maturity and effective duration were both 0.11 years, its three-year standard deviation was 0.21%, and its net assets were $95,892.45 million [1]. The fund's ten largest bills were 68.76% of the portfolio, with 44.98% of assets maturing in 31 to 60 days [1]. Its expense ratio is 0.09% [1].
The SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) is the older competitor. It carries a gross expense ratio of 0.1353% and returned 0.29% in June 2026, 0.88% for the second quarter and 1.74% for the first half at net asset value [2]. SGOV's history shows what a low fee and a short bill ladder deliver: 3.90% over one year, 4.68% a year over three years and 3.59% over five years to June 30, 2026, against 3.57%, 3.82% and 2.89% for its ICE 0-3 Month index [1].
Where bill yields sit on the curve
| Treasury par yield | Jan 2, 2026 | Aug 25, 2026 |
|---|---|---|
| 1-month | 3.72% | 3.79% |
| 3-month | 3.65% | 3.80% |
| 6-month | 3.62% | 3.95% |
| 1-year | 3.58% | 4.01% |
| 2-year | 3.47% | 4.17% |
| 10-year | 3.74% | 4.48% |
Data: U.S. Treasury daily par yield curve rates [3][4].
At the start of 2026 the curve was nearly flat: the 3-month bill at 3.65% paid almost the same as the 10-year note at 3.74% [4]. By August 25 the 10-year offered 0.68 points more than the bill, a normal upward slope [3]. That shift is the whole argument about cash in 2026: bills now pay less than bonds, but only because bond prices fell to get there, and an investor who stayed in bills avoided that loss.
The case for cash-like ETFs
- No price risk to speak of: SGOV's 0.11-year duration means a full one-point move in yields changes its price by about 0.1%, and its three-year standard deviation of 0.21% is a rounding error next to bond funds [1].
- Yield close to the policy rate: with the effective federal funds rate at 3.63% in June, July and August 2026, bill ETFs yielding 3.5% to 3.8% pass through nearly all of it [1][3][5].
- Tax treatment: interest on Treasury bills is generally exempt from state income tax, an advantage over bank deposits.
- Liquidity: both funds trade on exchange all day and pay monthly distributions [1].
The case against holding too much cash
Bills carry reinvestment risk. SGOV earned 5.28% in 2024 and 4.24% in 2025, and was on pace for less in 2026 as the policy rate fell from 4.33% in mid-2025 to 3.63% [1][5]. A holder who locked in a 2-year note at 4.17% on August 25, 2026 has that yield for two years; a bill holder gets whatever the next auction pays [3]. There is also an opportunity cost: the iShares Core U.S. Aggregate Bond ETF (AGG) offered a 4.51% SEC yield on June 30, 2026, 0.97 points more than SGOV, in exchange for a 5.80-year duration [1][6]. And over any long period, equities have compounded far above bills. Cash is a tool for near-term needs and for dry powder, not a growth asset.
SGOV vs BIL: which to use
The two funds do the same job. SGOV's 0.09% fee is lower than BIL's 0.1353%, a difference of about 0.045 points a year that shows up directly in yield [1][2]. BIL's 1-3 month index gives it a marginally longer ladder, but with both funds near 0.1 years of duration the distinction is cosmetic [1][2]. For an investor holding a large cash balance for months, the lower fee wins; for someone parking cash for weeks, either fund is fine and the brokerage platform usually decides.
T-bill ETFs paid about 3.5% to 3.8% in mid-2026 with almost no price risk, which is a fair deal for money that must stay safe but a poor substitute for bonds or stocks in money that does not.
The federal funds rate, bill yields and related series can be followed on DataPorium's economic metrics page, alongside fund data on the ETF page [5].
Key takeaways
- SGOV's 30-day SEC yield was 3.54% on June 30, 2026; the 3-month bill yielded 3.80% on August 25 [1][3].
- The effective federal funds rate was 3.63% from June through August 2026, down from 4.33% a year earlier [5].
- SGOV charges 0.09% and BIL 0.1353%; both have about 0.1 years of duration [1][2].
- The curve steepened in 2026: the 10-year paid 0.68 points more than bills by August 25 versus 0.09 points on January 2 [3][4].
- AGG's 4.51% yield offered 0.97 points more than SGOV for taking 5.80 years of duration [1][6].
Frequently asked questions
What is the current yield on SGOV?
SGOV's 30-day SEC yield was 3.54% as of June 30, 2026, and the fund returned 3.90% over the prior twelve months [1].
Is SGOV better than BIL?
They are close substitutes; SGOV's 0.09% expense ratio is lower than BIL's 0.1353%, which gives it a small yield edge over time [1][2].
Are T-bill ETFs safe?
They hold only U.S. Treasury bills with maturities of a few weeks to three months, so credit risk is minimal and price movements are tiny; SGOV's three-year standard deviation was 0.21% [1]. They are not FDIC insured.
Should investors hold cash in 2026?
Cash-like ETFs suit money needed within a year or two. With bills near 3.8% and the 10-year at 4.48% on August 25, 2026, longer bonds pay more but carry price risk, so the choice depends on the time horizon rather than on yield alone [3].
Sources & References
- [1] iShares 0-3 Month Treasury Bond ETF (SGOV) Fact Sheet as of June 30, 2026
- [2] State Street SPDR Bloomberg 1-3 Month T-Bill ETF (BIL) fund page and performance
- [3] U.S. Treasury Daily Par Yield Curve Rates, August 2026
- [4] U.S. Treasury Daily Par Yield Curve Rates, January 2026
- [5] DataPorium Economic Metrics: Federal Funds Rate, Inflation and Other U.S. Series
- [6] iShares Core U.S. Aggregate Bond ETF (AGG) Fact Sheet as of June 30, 2026
