Americans sitting on cash face a familiar bind: certificates of deposit promise safety, but they punish you for touching your own money before the term expires. A growing class of ultra-short Treasury ETFs now offers comparable yields, rock-bottom fees, and something a CD never will, the freedom to sell on any trading day without forfeiting months of earned interest.
The federal funds rate sits at 3.50% to 3.75%, and savers who locked into CDs months ago may already be watching newer rates drift lower. Meanwhile, five exchange-traded funds holding U.S. Treasury bills with durations under one year are delivering 30-day SEC yields between 3.40% and 3.56%, all with expense ratios capped at 0.15% or less. On a $10,000 investment, that fee ceiling costs no more than $15 a year.
The case for these funds is straightforward. CDs are FDIC-insured, but early withdrawal can mean forfeiting several months of interest. Treasury bill ladders built through TreasuryDirect.gov avoid that lockup, yet the platform itself has drawn criticism for being clunky and difficult to navigate. ETFs that hold the same short-dated government paper solve both problems at once: you get daily liquidity on a normal brokerage account, tight bid-ask spreads, and yields backed by the full faith and credit of the United States.
That backing comes with a caveat worth noting. U.S. government debt has been downgraded from AAA to AA. The ETFs profiled by Kiplinger's analysis of low-risk CD alternatives target holdings rated AA to AAA, meaning the downgrade did not disqualify Treasuries from the selection screen, but it is a reminder that even "risk-free" assets carry a credit rating that can move.
The iShares 0, 3 Month Treasury Bond ETF, ticker SGOV, dominates the space with $82.8 billion in assets under management. Launched on May 26, 2020, it tracks the ICE 0, 3 Month U.S. Treasury Securities Index and recently traded more than 50 million shares, a volume figure that speaks to how many investors now treat it as a parking lot for cash. Its expense ratio is 0.09%, its average duration is 0.09 years, and its 30-day SEC yield stands at 3.54%. The 30-day median bid-ask spread is a razor-thin 0.01%.
For savers who have watched banks quietly pocket the difference between what the Fed pays and what a savings account yields, funds like SGOV represent a direct route to the short end of the Treasury curve. The lesson from Capital One's $425 million settlement over low-rate savings accounts is plain: institutions do not always pass along higher rates voluntarily.
State Street's SPDR Bloomberg 1, 3 Month T-Bill ETF, known by its ticker BIL, has been around longer than any competitor on this list. Its inception date is May 25, 2007, meaning it traded through the 2008 financial crisis, the pandemic panic of 2020, and every rate cycle in between. It holds $49.9 billion in assets, charges an expense ratio of 0.1353%, and carries a 30-day SEC yield of 3.40%.
BIL's portfolio currently consists of 23 holdings. It trades roughly 500,000 shares per day with a 0.01% median bid-ask spread and an average duration of 0.09 years. For investors who value a long track record over the newest product on the shelf, BIL's nearly two decades of operating history are hard to match.
Global X's 1, 3 Month T-Bill ETF, ticker CLIP, launched on June 20, 2023, and has gained traction as a straightforward cash management tool. It tracks the Solactive 1, 3 Month U.S. T-Bill Index, holds 24 Treasury securities, and charges just 0.07% in annual fees. Its 30-day SEC yield is 3.55%, its average duration is 0.10 years, and its median bid-ask spread sits at 0.01%. Assets under management have reached $2.4 billion, not a giant, but growing fast for a fund barely two years old.
Vanguard entered the arena even more recently. Its 0, 3 Month Treasury Bill ETF, VBIL, debuted on February 7, 2025, and has already accumulated $5.6 billion in assets. It tracks the Bloomberg U.S. Treasury Bills 0, 3 Month Index, carries the lowest expense ratio on the list at 0.06%, and posts a 30-day SEC yield of 3.56%, the highest of the five. Duration is 0.10 years, and the bid-ask spread matches the field at 0.01%.
The speed at which VBIL gathered assets tells you something about demand. Savers are not content to let banks and CD issuers dictate terms when a Vanguard fund charging six basis points can deliver a comparable or better yield with no lockup.
F/m Investments offers a slightly different product with its U.S. Treasury 3-Month Bill ETF, ticker TBIL. Launched on August 9, 2022, TBIL holds $6.8 billion in assets and carries the highest expense ratio of the group at 0.15%. Its 30-day SEC yield is 3.44%, and its average duration is 0.25 years, longer than the others, reflecting its focus on the 3-month maturity point rather than the 0, 3 month range. The median bid-ask spread is 0.02%, still tight by any reasonable standard.
A slightly longer duration means marginally more sensitivity to rate moves. But at a quarter of a year, the practical difference in a stable-rate environment is negligible. Investors choosing among these five funds are splitting hairs, not making life-altering bets.
FDIC insurance does not apply to ETFs. CDs purchased at an insured bank carry that federal backstop up to certain limits. Treasury securities are backed by the U.S. government's ability to tax and print currency, a different kind of guarantee, and one that most fixed-income investors consider equivalent or superior in practice. But the distinction matters for anyone whose primary concern is the specific regulatory protection that FDIC coverage provides.
There is also a tax angle worth considering. Interest from Treasury securities is exempt from state and local income taxes in most jurisdictions, a feature that can nudge the after-tax yield above what a taxable CD delivers. For savers already navigating surprise tax consequences on financial rewards, the state-tax exemption on T-bill income is a welcome simplicity.
The broader point is one of leverage, not Wall Street leverage, but the everyday kind. For years, banks profited from customer inertia. Savers accepted whatever rate the local branch offered because alternatives seemed complicated or inaccessible. Building a Treasury bill ladder through TreasuryDirect.gov was technically possible but practically frustrating on a platform widely regarded as clunky.
These ETFs remove that friction. Any brokerage account that can buy a stock can buy SGOV or BIL or VBIL. The spreads are a penny wide. The fees are negligible. And the yields track short-term government rates far more faithfully than most bank savings products, a reality that Capital One's customers learned the hard way when the bank kept them parked in low-rate accounts while rates climbed.
None of this is exotic. These funds hold the most boring securities on earth: U.S. Treasury bills maturing in weeks or months. The selection criteria used to identify them, durations of one year or less, ratings of AA to AAA, expense ratios at or below 0.15%, and 30-day median bid-ask spreads of 0.05% or less, are designed to screen for the dullest possible corner of the bond market.
Dull is the point. Savers looking for safety and liquidity do not need excitement. They need their principal intact, a reasonable yield, and the ability to access their money when they need it. CDs deliver the first two but fail on the third. These five ETFs deliver all three.
With tax refunds putting extra cash back in Americans' pockets, the question of where to park short-term savings is more relevant than usual. Stuffing it into a CD that penalizes early withdrawal is not the only option, and for most people, it is no longer the best one.
The financial industry spent decades making simple things complicated so it could charge you for the confusion. Five Treasury ETFs charging between six and fifteen basis points are proof that the game works in reverse, too, and that savers who pay attention can keep more of what they earn.