Is SGOV Better Than a HYSA? It Depends on Your State

Short answer: for most people, yes. SGOV pays 4.01% right now, and most banks pay less. If yours does, SGOV pays you more, in every state and at every income.

The exception is a short list of online banks that pay more than SGOV. If your savings are with one of them, your state decides. I made this choice myself while living in California, where the top state tax rate is 13.3%, and I keep eleven months of expenses in SGOV.

Source note: SGOV’s yield averages the 4-week and 3-month T-bill yields as of October 9, 2026, less its 0.09% expense ratio. Bank rates are as published on October 12 to October 13, 2026 (8 of 63 last verified September 28, 2026). The state comparison uses 2026 brackets, a 22% federal rate, and the 95% of SGOV’s 2025 income that states could not tax.

What SGOV is

SGOV is a fund you buy in a brokerage account, like a stock. It holds short-term loans to the U.S. government, called Treasury bills.

A high-yield savings account (HYSA) is an online bank account that pays more than a big bank’s savings account.

Why SGOV has an edge: state tax

You pay federal tax on both. But your state can’t tax interest from Treasury bills, and about 95% of SGOV’s income is exactly that. Your state does tax bank interest.

So if you live in a state with an income tax, SGOV keeps more of what it earns. That is why it won for me in California.

Does your bank pay more than SGOV?

Probably not. Of the 63 savings accounts, brokerage cash accounts, and money market funds I track, 6 pay more than SGOV’s 4.01%:

If your bank isn’t on this list, you’re done: SGOV pays you more, wherever you live.

X Money isn’t on the list either. Its 6% comes with conditions and limits on getting your money out, so I compared it separately in X Money’s 6% against SGOV.

If it is, check your state

A bank on that list pays a little more than SGOV, but your state taxes it. Whether the higher rate survives the tax depends on where you live.

• SGOV · 14
• Depends on income · 17
• Savings paying 4.25% or more · 20

• Dark green: SGOV still wins, because your state’s tax is high enough.
• Gray: the bank wins. Some have no income tax; in the rest, the tax is too low to make up the bank’s higher rate.
• Light green: it depends on your income. The more you earn, the higher your tax rate, and the better SGOV looks.

The bigger mistake: leaving it at a big bank

The difference between SGOV and the best savings account is small. The difference between either one and a big bank’s savings account is not.

Chase Savings pays 0.01%. On $30,000, that’s about $3 a year, against about $1,203 in SGOV. Here is what staying costs over time:

Chase Savings · $1,196 a yearAmex Savings · $343 a yearSoFi Savings · $288 a year

What SGOV gives up

SGOV isn’t a bank account. It isn’t FDIC-insured,¹ and its price can move slightly from day to day. When you sell, the cash takes a business day to arrive, then a transfer to reach your bank.

That’s why I keep next month’s expenses in my bank and the rest in SGOV. I explain the setup in where I keep my emergency fund.

Check your own numbers

SGOV vs HYSASee what your savings earn against SGOV and T-bills after tax, in your state.Open the tool →

Pick your bank, your state, and your income. The calculator shows what each option pays you after tax.

For the numbers-minded

State lists, income cutoffs, and the break-even formula

States by result. The map compares SGOV with the best account on the list that has no conditions, 4.25% at Pibank, for a single filer at $60,000 and $250,000 incomes. Even against the best of them, SGOV wins at both incomes in California, Connecticut, Delaware, District of Columbia, Hawaii, Idaho, Kansas, Maine, Minnesota, New Jersey, New York, Oregon, South Carolina, and Virginia. The best of them beats SGOV at both incomes in Alaska, Arizona, Arkansas, Florida, Indiana, Iowa, Kentucky, Louisiana, Mississippi, Nevada, New Hampshire, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Texas, Washington, and Wyoming. Some of these states don’t tax income from interest, so there is no state tax for SGOV to skip and the higher rate wins. Arizona, Arkansas, Indiana, Iowa, Kentucky, Louisiana, Mississippi, North Carolina, North Dakota, Ohio, and Pennsylvania tax income at a rate too low to offset the savings account’s higher rate.

Where income decides. Below each income, the savings account wins; above it, SGOV wins. Single filer:

Your federal rate rises with income everywhere, and your state rate does in most states. Higher tax rates shrink the savings account’s lead. Married couples reach each bracket at a higher income; for them, SGOV wins at both map incomes in 10 states.

The break-even line. SGOV wins when your state’s tax rate on your last dollars of income (your top bracket) is above:

(1 − federal rate) × (savings yield − SGOV yield) ÷ (savings yield − SGOV yield × taxed share)

The taxed share is the part of SGOV’s income that doesn’t skip state tax, about 5%. At today’s rates and a 22% federal bracket, the line is a state rate of about 4.6%.

The counts move with small rate changes. If the best account paid 4.05% instead, SGOV would win at both incomes in 41 states. Using SGOV’s 30-day SEC yield (3.72% on October 9, 2026), which lags when rates move, the best savings account would win at both incomes in 40 states.

Why not buy Treasury bills directly? You get the same tax break, but you have to roll them over every few weeks. The calculator compares both.

Treasury bill yields as of October 9, 2026, from the U.S. Treasury;² SGOV figures from iShares; savings rates checked October 12 to October 13, 2026 (8 of 63 last verified September 28, 2026), on each bank’s own page. These update as the data does. 2026 state brackets from the Tax Foundation,³ updated for laws passed later in the year; federal brackets from IRS Revenue Procedure 2025-32.⁴ Local income taxes, such as New York City’s, are not included. Definitions of the terms used here are in the glossary. This is how I think about my own cash, not tax or investment advice.