If you’re looking for a safe, low-risk way to park cash in a taxable account, Treasury bill ETFs like SGOV, BIL, SHV, and TFLO are excellent options. These ETFs invest in short-term U.S. government securities, offering high liquidity, minimal interest rate risk, and tax advantages. Here's a quick breakdown:

  • SGOV: Lowest expense ratio (0.09%) and ultra-short maturity (0-3 months). Ideal for short-term cash needs and high-tax states.
  • BIL: Largest fund with high liquidity, slightly higher expense ratio (0.14%). Great for frequent transactions.
  • SHV: Includes bonds up to 1 year, offering slightly higher yields for medium-term cash needs (6-18 months).
  • TFLO: Invests in floating-rate notes, adjusting to rising interest rates. Best for longer timelines (12-24 months) in a rising-rate environment.

Quick Comparison

ETF Focus Maturity Range Expense Ratio Best For
SGOV Ultra-short T-bills 0-3 months 0.09% Emergency funds, high-tax states
BIL Ultra-short T-bills 1-3 months 0.14% High liquidity, frequent transactions
SHV Short-term Treasury bonds Up to 1 year 0.15% Medium-term cash needs
TFLO Floating-rate notes Variable 0.15% Rising-rate environments

Each ETF has unique strengths depending on your cash needs, tax situation, and interest rate outlook. Choose based on your timeline and financial goals.

9 Best T Bills ETFs for 2025 (Treasury Bills) - SHV, SGOV, BIL, + More

SGOV, BIL, SHV, and TFLO: The 4 Main Options

Let’s dive deeper into four standout T-bill ETFs that provide solid options for parking cash. These funds - SGOV, BIL, SHV, and TFLO - each take a slightly different approach to U.S. Treasury investments, offering flexibility based on your specific time horizon and views on interest rates.

While all of these ETFs focus on short-term government securities, they vary in terms of maturity ranges, expense ratios, and investment strategies. Knowing these differences can help you zero in on the best fit for your cash management goals.

ETF Investment Focus Maturity Range Expense Ratio Assets Under Management Launch Year
SGOV Ultra-short Treasury bills 0-3 months 0.09% $35.88 billion 2020
BIL Ultra-short Treasury bills 1-3 months 0.14% $42.67 billion 2007
SHV Short-term Treasury bonds Up to 1 year 0.15% $19.38 billion Oldest
TFLO Treasury floating rate notes Variable 0.15% N/A N/A

Here’s a closer look at what each of these ETFs brings to the table.

SGOV: iShares 0-3 Month Treasury Bond ETF

SGOV focuses on ultra-short-term Treasury bills with a weighted-average maturity of just 0.09 years. This makes it a low-risk option with minimal exposure to interest rate fluctuations.

Since its launch in May 2020, SGOV has grown to manage nearly $35.88 billion in assets. Its expense ratio of 0.09% is the lowest among the four ETFs, allowing you to keep more of your returns. The fund’s stability makes it a great choice for short-term cash needs or as an emergency fund, where preserving capital is key. Next, let’s look at BIL, another popular ultra-short-term option.

BIL: SPDR Bloomberg 1-3 Month T-Bill ETF

SPDR

BIL has been a reliable option since May 25, 2007, making it the most established ETF in this group. It tracks the Bloomberg 1-3 Month U.S. Treasury Bill Index, focusing on Treasury bills with maturities between one and three months.

As of November 13, 2025, BIL manages over $42.67 billion in assets, making it the largest fund on this list. Its weighted-average maturity is 0.14 years, with an expense ratio of 0.14%. The fund also boasts a tight 30-day median bid-ask spread of just 0.01%, making it easy to access your cash when needed. For those seeking broader exposure, SHV is worth considering.

SHV: iShares Short Treasury Bond ETF

SHV provides a slightly broader approach by holding Treasury bills with maturities of up to one year. This gives the fund a weighted-average maturity of 4.7 months, offering a bit more yield potential while still keeping risk low.

With over $19.38 billion in assets, SHV is the oldest fund in this group. It carries a 0.15% expense ratio and is a good choice for those with medium-term cash needs who can afford to lock up their funds for several months. If you’re looking for an ETF that adjusts to rising interest rates, TFLO might be the right fit.

TFLO: iShares Treasury Floating Rate Bond ETF

TFLO stands out by investing in Treasury floating rate notes rather than fixed-rate Treasury bills. These securities adjust their interest payments weekly, based on the latest three-month Treasury bill rate.

This floating-rate structure is particularly appealing when interest rates are on the rise. Unlike fixed-rate bonds, which tend to lose value as rates increase, TFLO’s coupon payments adjust upward, helping to maintain price stability while boosting income. With a 0.15% expense ratio, TFLO is a smart choice for those who expect rates to climb and want their ETF to adapt to changing conditions.

With each ETF’s unique approach now outlined, the next step is to explore their tax efficiency and after-tax performance.

Tax Benefits and After-Tax Returns Compared

When it comes to taxable accounts, understanding how T-bill ETFs are taxed can make a big difference in your actual returns. These funds, which are based on U.S. Treasury securities, offer tax advantages that can boost your after-tax yield.

How T-bill ETFs Are Taxed

T-bill ETFs inherit the tax perks of U.S. Treasury securities. One of the biggest advantages? The distributions from these ETFs are typically exempt from state and local income taxes, just like the underlying Treasury securities themselves. On the federal level, however, these distributions are taxed as ordinary income - similar to the interest you might earn from a savings account or a CD. This feature can be particularly appealing for investors living in states with high income tax rates.

Another plus is that T-bill ETFs generally generate minimal capital gains distributions. Since these funds focus on short-term holdings that are close to maturity, there’s less portfolio turnover. That means fewer surprise tax bills and a smoother tax planning process overall.

After-Tax Returns Analysis

The tax benefits of T-bill ETFs translate directly into a higher effective yield. Thanks to the exemption from state and local taxes, these ETFs often outperform other fixed-income investments that are fully taxable at all levels. The exact boost to your after-tax return will depend on your specific tax situation, including your federal tax bracket and the rates in your state.

For example, some ETFs with floating-rate structures can adjust their distributions as interest rates shift. This flexibility may increase your after-tax income without the price swings you might see with fixed-rate bonds. In a rising-rate environment, this adaptability can be even more valuable, as higher yields combine with tax efficiency to improve overall returns.

Costs, Returns, and Trading Volume

When considering T-bill ETFs for cash management, even minor cost differences can make a noticeable dent in net returns. These costs are a key factor to weigh before diving into liquidity - an essential aspect for executing trades efficiently and on time.

Trading Volume and Liquidity Factors

Liquidity plays a pivotal role in ensuring trades happen quickly without significantly affecting prices. On this front, BIL stands out. As of November 13, 2025, it boasted an exchange volume of 644,080 shares and maintained an impressively narrow 30-day median bid-ask spread of just 0.01%.

"ETF liquidity hinges not only on daily trading volumes but also on the liquidity of its underlying securities." - Tony Dong, Editor, U.S. News

This precise liquidity metric ties back to earlier discussions on costs and yields, emphasizing its importance in overall ETF performance. For investors managing larger transactions or trading frequently, strong liquidity like this can significantly enhance cash management in taxable accounts.

Which ETF to Choose for Different Situations

When it comes to picking the right ETF, your decision should align with your cash flow needs and how you view the market's direction. Each of the four options discussed here serves a distinct purpose, and knowing when to use each can help you balance liquidity with optimal returns.

When SGOV or BIL Makes Sense

SGOV and BIL are solid choices if you’re looking for maximum flexibility with minimal exposure to interest rate changes. Both ETFs invest in very short-term Treasury securities, making them ideal for emergency funds, upcoming expenses, or a temporary place to park cash.

SGOV is particularly appealing for those in high-tax states like California or New York. Its structure may provide additional state tax benefits, which can be especially valuable if you’re dealing with steep income tax rates.

On the other hand, BIL shines when liquidity is a priority. Its high liquidity makes it well-suited for frequent transactions or for handling institutional-sized trades, even in volatile markets.

Both ETFs are best for short-term cash needs - think three to six months - to avoid the risks associated with longer durations. If your timeline extends beyond that, you might want to look at SHV.

SHV for Slightly Longer-Term Cash Needs

SHV is a better fit for those with a longer cash timeline who are comfortable with a bit more interest rate sensitivity in exchange for potentially higher yields. This ETF focuses on securities maturing within 12 months and usually delivers better returns compared to ultra-short-term options, especially during normal yield curve conditions.

It’s a great option if you’re saving for a specific expense 6-18 months down the road, like a down payment on a house, a major purchase, or a business investment. The slightly longer duration provides an opportunity for higher yields without taking on significant principal risk.

SHV also works well as a core cash holding for investors who keep a larger portion of their portfolio in cash equivalents. If you maintain 10-20% of your portfolio in cash and don’t need daily liquidity, SHV’s added yield can compound over time.

That said, SHV might not be the best choice if you anticipate the Federal Reserve raising interest rates aggressively in the near future, as its longer duration could lead to more price fluctuations compared to SGOV or BIL.

TFLO When Interest Rates Are Rising

TFLO is unique because of its floating rate structure, making it an excellent choice when you expect interest rates to rise. As discussed earlier, TFLO’s adjustable yield provides a safeguard against the downside of rising rates.

This ETF is particularly useful during periods of monetary policy tightening or when inflation is pushing rates higher. Its floating rate mechanism adjusts quickly to capture rising yields, protecting your investment from the declines typically seen in fixed-rate securities. However, keep in mind that yields will also drop faster when rates begin to fall.

TFLO is a good fit for investors with a longer timeline - say 12-24 months - who are building up cash for future opportunities or maintaining a strategic cash reserve. It’s especially valuable if your priority is protecting against rate hikes rather than maximizing immediate income.

Consider TFLO when economic indicators suggest the Federal Reserve is entering an extended period of rate increases or if you want to safeguard your cash’s purchasing power in an inflationary environment. While its current yield might be lower than fixed-rate options in an upward-sloping yield curve, its rate protection makes it a smart choice for patient investors with flexible plans.

Making the Right Choice for Your Cash Management

Selecting the right T-bill ETF means matching your financial needs with the specific strengths of each fund. There isn’t a one-size-fits-all solution - what works best depends entirely on your circumstances.

SGOV and BIL stand out for their high liquidity and minimal interest rate risk. These qualities make them ideal for emergency funds, upcoming expenses, or short-term cash needs that arise within a few days or months. If you're okay with slightly longer durations to potentially secure higher yields, SHV could be a better fit, especially for significant purchases or reserves planned 6–18 months ahead. Meanwhile, TFLO, with its floating rate structure, shines in rising interest rate environments. Understanding these differences can help you align your choice with your specific cash management goals.

When evaluating these ETFs, focus on after-tax returns rather than just the headline yields. All four benefit from state and local tax exemptions on Treasury securities, which can make a meaningful difference in your overall returns.

The current interest rate environment is another crucial factor. In a rising rate scenario, TFLO offers protection against rate increases, while fixed-rate options like SGOV, BIL, and SHV provide more stable income when rates are steady or declining. Balancing yield, risk, and market conditions is key to making the right decision.

If you're looking for tools to streamline this process, Mezzi’s advanced platform can help. With features like comprehensive account aggregation and AI-driven insights, Mezzi simplifies portfolio optimization. It also ensures effective tax management, helping you navigate potential challenges like wash sales, and provides the in-depth analysis you need to refine your cash management strategy.

FAQs

What are the tax advantages of T-bill ETFs like SGOV, BIL, SHV, and TFLO compared to other fixed-income options?

T-bill ETFs come with a key tax perk: the interest income they produce is usually exempt from state and local taxes, though it’s still subject to federal income tax. This tax treatment can make them a smarter choice compared to other fixed-income investments like corporate bonds or CDs, which are taxed at every level.

For those living in high-tax states, this exemption can translate into meaningful savings. It’s one reason why T-bill ETFs are a popular option for holding cash in taxable accounts while keeping tax liabilities lower.

What should I consider when deciding between SGOV, BIL, SHV, and TFLO for managing cash in a taxable account?

When weighing options like SGOV, BIL, SHV, and TFLO for managing cash in a taxable account, it's important to evaluate tax efficiency, yield, expense ratios, and liquidity. These factors directly influence your returns and potential tax burdens.

Start by comparing the yields of each ETF against their expense ratios to ensure you're optimizing your net returns. Some funds may offer higher yields but come with higher expenses, so finding the right balance is crucial. Also, take a close look at the tax treatment of each fund - certain ETFs may offer advantages for taxable accounts, helping you retain more of your earnings. Lastly, liquidity matters; you want to ensure you can trade shares easily without causing significant price fluctuations.

By carefully considering these aspects, you can choose the ETF that aligns best with your financial strategy and cash management goals.

How do changes in interest rates impact the performance and suitability of SGOV, BIL, SHV, and TFLO for cash parking?

The performance and appeal of T-bill ETFs like SGOV, BIL, SHV, and TFLO are closely influenced by the prevailing interest rate environment. When interest rates increase, the prices of existing bonds typically drop, which can slightly affect the value of these ETFs. However, since these funds focus on short-term Treasury securities, they are far less impacted by interest rate shifts compared to funds holding long-term bonds.

In periods of rising rates, short-term T-bill ETFs often provide higher yields as they adapt more quickly to the changing rates. A key metric to assess their income potential is the 30-day SEC yield, which reflects the most recent interest income from the underlying securities. These ETFs are commonly seen as a dependable choice for safeguarding capital while delivering consistent returns, particularly in taxable accounts.

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