One of my biggest attractions to U.S. Treasuries is that they are state tax-exempt. I use VBIL instead of a HYSA. For myself in D.C., that is 9.25% in tax I'm avoiding. MUNIs like VTEB, although much more volatile, are federal tax-exempt. I have an allocation of VTEB for longer-term emergency funds. The federal marginal tax rate on what I'm saving there is 35% Both are in a taxable brokerage account. Obviously they lose their advantage in retirement accounts like IRAs and 401(k)s as they are tax exempt or deferred.
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One of my biggest attractions to U.S. Treasuries is that they are state tax-exempt. I use VBIL instead of a HYSA. For myself in D.C., that is 9.25% in tax I'm avoiding. MUNIs like VTEB, although much more volatile, are federal tax-exempt. I have an allocation of VTEB for longer-term emergency funds. The federal marginal tax rate on what I'm saving there is 35% Both are in a taxable brokerage account. Obviously they lose their advantage in retirement accounts like IRAs and 401(k)s as they are tax exempt or deferred.
Post: Beyond Bank Accounts
Link to comment from June 16, 2026