MS Excel: TBILLEQ function for treasury bills

In fixed-income investing, Treasury bills (T-bills) are one of the most common short-term government securities. They are zero-coupon instruments, sold at a discount and redeemed at face value.

While the discount rate is traditionally used to quote yields on T-bills, it's not directly comparable to bond-equivalent yields used for other instruments. That's where Excel's TBILLEQ function becomes essential.

The TBILLEQ function returns the bond-equivalent yield (BEY) for a Treasury bill. This allows investors to compare T-bills with bonds that pay interest on a semiannual basis.

It adjusts the T-bill's discount rate into an annualized yield using a bond-equivalent basis.

Syntax

=TBILLEQ(settlement, maturity, discount)

Argument Details:

Argument	Description
settlement	The date when the T-bill is purchased or settled
maturity	The date when the T-bill matures
discount	The T-bill discount rate (as a decimal or percent)

Dates must be entered using Excel's valid date format (e.g., DATE(2025, 4, 1)).

Example: Calculate Equivalent Yield

Scenario: A 90-day Treasury bill is purchased on April 1, 2025, matures on June 30, 2025, and has a discount rate of 2.5%. What is the bond-equivalent yield?

=TBILLEQ(DATE(2025,4,1), DATE(2025,6,30), 0.025)

Result: 0.02532 or 2.532%

This value is the bond-equivalent annual yield, which is more directly comparable to yields from coupon-paying instruments like Treasury notes or corporate bonds.

Why Use TBILLEQ?

Use Case	Benefit
Compare T-bills to bonds	Converts discount yield to bond-equivalent yield
Investment analysis	Helps make apples-to-apples yield comparisons
Portfolio construction	Ensures consistent yield metrics
Fixed-income presentations	Standardizes data for clients and stakeholders

Related Functions

Function	Description
TBILLPRICE	Calculates the price of a T-bill
TBILLYIELD	Returns the yield based on T-bill price
YIELD	Calculates yield for bonds with periodic interest
DISC	Returns the discount rate for a security
PRICE	Returns the price of a bond given its yield

Use TBILLEQ specifically when you need to express the T-bill return as a bond-equivalent annual yield.

Tips and Best Practices

Tip	Reason
Ensure correct date format	Excel date errors can produce #NUM! or #VALUE!
Use decimal for discount	e.g., 2.5% → 0.025
T-bill term must be ≤ 1 year	Excel will return an error for longer maturities
Dates must be in chronological order	maturity must be after settlement

Best Practice: Use Excel’s DATE() function to ensure clean, reliable input for settlement and maturity.

Summary Table

Feature	Value
Function Name	TBILLEQ
Purpose	Calculates bond-equivalent yield for Treasury bills
Best For	Comparing T-bills to bonds
Inputs	Settlement date, maturity date, discount rate
Output	Bond-equivalent annual yield (decimal)

Final Thoughts

The TBILLEQ function is a critical tool in any fixed-income investor's Excel toolbox. It bridges the gap between discount-based and interest-bearing yield conventions, ensuring transparent, comparable analysis across instruments.

Whether you are:

• Comparing short-term government securities

• Building fixed-income dashboards

• Educating clients on T-bill returns

TBILLEQ offers an efficient and precise way to calculate realistic, bond-equivalent yields.