BIL: Cash that earns. The original.

Key metrics

Fund snapshot

Verify current data at the official fund page. Metrics change.

Performance snapshot

Past performance is not indicative of future results.

The returns look boring on purpose — they're supposed to. BIL has a beta of essentially zero, which means it barely moves with the market. Over 3 years it has returned about 3.5% annually, tracking short-term Treasury rates minus the 14-cent fee per thousand dollars invested. For comparison, the S&P 500 averaged roughly 8-9% over the same period — but that number includes crashes like 2022 when equities fell nearly 20%. BIL didn't fall at all.

What it is and why it matters

What it actually is

BIL holds U.S. Treasury bills that mature in 1-3 months. That's the fund's entire strategy, stated plainly. The underlying index — Bloomberg's 1-3 Month U.S. Treasury Bill Index — specifies exactly what goes in: T-bills issued by the U.S. government with maturities between 1 month and 3 months from purchase.

The portfolio typically holds around 28 different bill maturities at any given time, staggered so that bills mature every week or two. When a bill matures, BIL buys a new one. This rolling process keeps the fund's average maturity near 1-2 months while collecting interest on whatever bills are outstanding.

How it works mechanically

The trick most investors skip: T-bills pay no coupon — they're issued at a discount and redeemed at face value. A 91-day bill purchased for $98.50 pays back exactly $100 on maturity, with the $1.50 difference constituting interest. BIL accumulates these discounts daily and distributes them to shareholders as monthly dividends.

The fund uses an authorized participant (AP) creation/redemption mechanism typical of ETFs — large institutional investors can exchange baskets of T-bills for shares or vice versa, which keeps the share price closely aligned with net asset value. This is why BIL trades at essentially exactly its NAV and doesn't have the kind of bid-ask spreads that plague less liquid ETFs.

Why that matters for the Park slot

The Park slot has a single job: hold cash safely while earning something above zero. BIL accomplishes this with high efficiency — its yield tracks short-term Treasury rates almost exactly, minus 0.14%. The fund's daily NAV fluctuation is typically measured in fractions of a cent.

This matters because the alternative — leaving cash in a brokerage account earning nothing while waiting to deploy it into VOO or SCHD — costs investors real money in opportunity terms. Even at modest rate levels, $50,000 sitting idle for 3 months loses roughly $187 in forgone interest compared with parking it in BIL.

The honest read vs SGOV

BIL and SGOV hold essentially the same assets: U.S. Treasury bills maturing in under 3 months. The performance is virtually identical — the yield difference between them is measured in hundredths of a percent, which is noise at this scale. The real difference is cost: BIL charges 0.14% while SGOV charges 0.09%. That's a 56% fee premium.

So why does BIL exist? State Street launched it in May 2007 — more than 13 years before SGOV arrived. BIL built the category, established the liquidity, and earned trust during the financial crisis when investors flocked to Treasury bills for safety. That track record matters to some investors, particularly those already using State Street or SPDR products.

The honest summary: BIL costs more than SGOV for the same thing, but there are legitimate reasons to prefer it — longer history, State Street ecosystem fit, and a proven track record that predates the 2008 crisis by years.

Cost analysis

Expense ratio in context

BIL charges 0.14%, which means $14 per year for every $10,000 invested. That's still cheap compared to virtually any actively managed alternative, but it's 56% more than SGOV's 0.09% fee — the gap that defines this comparison.

The category average for ultrashort bond ETFs sits around 0.35% — nearly three times BIL's fee. So while BIL costs more than SGOV, it's still well below the category average. The real cost conversation here is measured in basis points per year on a cash position that already earns almost nothing.

How it compares to alternatives

The yield differences between these funds are measured in hundredths of a percent — statistically zero over any meaningful holding period. The real differentiator is expense ratio, and SGOV wins on that dimension decisively.

Long-term compounding impact

$100,000 invested in BIL versus SGOV for 20 years costs roughly $865 more with BIL's higher fee. That's the kind of number that sounds impressive but is actually negligible when you consider the fund's total return over 20 years — somewhere around $190,000 to $220,000 at current rate levels. The expense ratio matters enormously for equity index funds and not at all for cash parking.

BIL vs. the competition

BIL vs. SGOV

Same job, higher cost — and that's the honest read. The iShares 0-3 Month Treasury Bond ETF (SGOV) holds essentially identical assets: U.S. Treasury bills maturing in under 3 months. But SGOV charges 0.09% instead of BIL's 0.14%. That's a 56% fee premium for what is, at this scale, indistinguishable exposure.

BIL has been around longer (2007 vs 2020) and State Street built it first, which gave it credibility early on. BIL also has a proven track record through the financial crisis — investors who needed absolute safety in 2008-2009 found it here. SGOV overtook BIL in AUM ($84.75B vs ~$51.1B) once investors noticed the fee difference. The two funds' yields differ by a few hundredths of a percent — basically noise.

BIL vs. SHV

SHV holds slightly longer-duration Treasuries with marginally more rate exposure. The iShares 0-1 Year Treasury Bond ETF (SHV) holds Treasuries maturing in up to 1 year instead of 1-3 months. This means SHV's yield typically runs a few basis points higher when rates are rising and falls faster when they're falling — the classic duration tradeoff, compressed into ultrashort timeframes.

BIL is more conservative: its 1-3 month maturity range keeps duration risk near zero. SHV's 0-1 year range introduces a small amount of price sensitivity to rate changes. Over 3 months, both funds produce nearly identical returns. Over longer periods, SHV may outperform if rates rise and underperform if they fall — but not by enough to justify the complexity of deciding which fund to use.

BIL vs. USFR

The floating-rate alternative most investors don't need. The WisdomTree Floating Rate Treasury Fund (USFR) holds Treasury securities with interest rates that reset periodically, typically tied to SOFR or similar benchmarks. This means the fund's yield moves up and down with short-term rate changes, sometimes more smoothly than BIL because floating-rate notes adjust faster as markets price in Fed decisions.

The complexity of a floating-rate strategy is what USFR charges for — 0.15% expense ratio compared to BIL's 0.14%. Most investors using the Park slot don't care about smooth yield curves; they just want cash parking that works and doesn't require another decision to make.

Verify current data with fund sponsors. Numbers change.

Who should own BIL

Investors who should consider it

State Street platform users. If your brokerage or advisory relationship centers on State Street products, BIL fits naturally. You may already have SPDR access, and consolidating your holdings with one sponsor simplifies tax reporting and account management.

Investors who value track record. BIL has been around since May 2007 — through the financial crisis, the dot-com crash aftermath, two rate-hiking cycles, and multiple market corrections. If you prefer a fund that has been tested by extreme conditions, BIL's 19-year history is meaningful. SGOV, launched in 2020, hasn't had that test.

Anyone with a brokerage account and cash sitting in it doing nothing. Most investors leave uninvested money — paychecks, dividends, rebalancing proceeds — sitting as idle cash earning zero. Parking that money in BIL while you decide what to deploy is the easiest free lunch in investing.

Investors who should look elsewhere

Cost-minimizers. If your primary criterion is lowest fee, SGOV is the answer. The 0.05% difference between BIL and SGOV is small in absolute terms but represents a 56% premium. Over decades of cash parking, that adds up — though as noted above, it's negligible relative to total returns.

Anyone with a time horizon longer than 1 year. If you're investing for retirement in 20 years, BIL is the wrong slot. Put that money in your Grow allocation (VOO or VTI) where compounding has decades to work instead of wasting it on cash returns.

Investors seeking FDIC-insured deposits. If you need the federal insurance floor and don't want any brokerage risk, keep your emergency fund in a bank. BIL is backed by U.S. Treasuries (which are as close to "safe" as exists in finance), but they aren't FDIC-insured deposits — they're securities held in a brokerage account.

Risks and considerations

Interest rate risk — yield falls when the Fed cuts rates. This is BIL's primary vulnerability, though it manifests as income decline rather than price loss. If the Fed cuts from 5% to 1%, your monthly paycheck from BIL shrinks by roughly $33 per month on a $100,000 position. The fund doesn't lose principal in this scenario — just income.

Credit risk is effectively zero but not zero. BIL holds U.S. Treasury bills, which are backed by the full faith and credit of the United States government. This means the risk isn't a default on any individual bill; it's the much more extreme scenario of sovereign default. That's an absurdly unlikely event but worth noting if you're being thorough about risk.

The yield is not guaranteed. Unlike a certificate of deposit or a savings account rate, BIL's distribution yield changes every time the fund purchases new bills at different market rates. The 30-day SEC yield published each month is a snapshot — useful for comparison but not a promise of future performance. Over long periods it has averaged roughly what short-term Treasury rates have been, minus the fee.

The opportunity cost of higher fees. While BIL's 0.14% expense ratio is cheap in absolute terms, it's worth acknowledging that you're paying more than SGOV for essentially identical exposure. For most investors starting fresh, this premium isn't justified. But for State Street loyalists or history-conscious investors, the longer track record may be worth the small additional cost.

How BIL fits in the Five Fund Frame

The Park slot is where most investors make a mistake they don't realize they're making: leaving idle cash earning nothing. The Five Fund Frame requires a dedicated position for money you might need in the near term, and BIL accomplishes this with minimal overhead. It doesn't try to be clever — it's just T-bills held inside an ETF wrapper that pays monthly dividends.

The suggested Park allocation by life stage ranges from 5% (20s) to 20% (60s+), reflecting the increasing need for liquidity as retirement approaches. A 35-year-old investor with steady income and a paid-down mortgage might only need 10% in Park — cash waiting for deployment into the Grow slot during market dips. Someone approaching retirement at 60 might keep 20% in BIL to avoid forced selling of equities during downturns.

Starting points, not personalized advice. Adjust to your situation.