To compare the effective interest rates of T-bill and CD, you need to take into account that T-bill is exempt from state tax. 1. Find out your marginal state income tax rate Rtax. Marginal means the rate applying to the highest tax bracket you are in. 2. Find out the T-bill rate through brokerage or the recent auction results on treasury direct Rtbill. 3. Compare Rcd*(1-Rtax) with Rtbill.