Treasury and TIPS Ladder Rungs, October 22, 2026: Yields and Cost

Most pages on ladders explain the idea and stop. This one prices it. It takes the Treasury yield files for October 22, 2026, builds the rungs, shows the arithmetic, and then puts the tax and the FDIC limit on the same table, because the answer for a reader holding $250,000 or more depends on both. It makes no claim about which ladder is better. Rates moved 17 basis points in the last session in the file, and every number below is dated for that reason.

How the rungs are priced

A Treasury par yield is the coupon a security would need to sell at par. We treat it as the coupon of a par bond maturing in that year (our arithmetic, annual coupons; real notes pay semiannually and are bought above or below par). The Treasury publishes par yields at 1, 2, 3, 5, 7, 10, 20 and 30 years. For years 4, 6, 8 and 9 we interpolate in a straight line between the published points, and the tables mark each such rung as interpolated. The Treasury sells notes of 2, 3, 5, 7 or 10 years, bills of 4, 6, 8, 13, 17, 26 and 52 weeks, and TIPS; a real ladder buys the nearest maturity that was auctioned.

Step 1: the curve on October 22, 2026

Source: U.S. Treasury, Daily Treasury Par Yield Curve Rates and Daily Treasury Real Yield Curve Rates, October 2026. The real curve has no point below 5 years. Breakeven and one-day changes are our arithmetic.

Step 2: ten equal rungs of $100,000

An equal-rung ladder is the simplest to build and it does not pay a level income. Each rung pays its coupon until it matures, so the interest falls every year as rungs drop out.

Each year's cash is the interest above plus $100,000 of principal from the rung that matures. After-tax columns apply the federal rate to interest only; the rates are those of the 2026 brackets below, and 40.8% adds the 3.8% net investment income tax of 26 U.S.C. 1411(a)(1). All figures are our arithmetic from the yields in the table.

Source: Rev. Proc. 2025-32, section 4.01, Tables 1 and 3, for taxable income in 2026. The NIIT applies to the lesser of net investment income or the excess of modified adjusted gross income over $250,000 for a joint return or $200,000 in any other case (26 U.S.C. 1411(b)). State income tax is zero on this interest: 31 U.S.C. 3124(a) says that obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. See which funds and states differ and the tax-equivalent math against munis.

Step 3: what a level $100,000 a year costs

Retirement ladders are usually sized to an income, not to equal rungs. To get exactly $100,000 in each of ten years, work backward from year 10: the 10-year rung must return $100,000 with its last coupon, so its face amount is $100,000 divided by 1 plus its yield; each earlier rung is sized so that its principal plus the coupons of the rungs still alive add up to $100,000 (our arithmetic).

The ladder costs $777,579 at par to deliver $1,000,000 of cash flows before tax; the $222,421 difference is the interest. Federal tax on that interest:

Two cautions about the number. It is a par-bond approximation: real notes carry coupons in eighths of a point and trade at a premium or discount, and accrued interest, bid-ask spreads and rounding to $1,000 or $100 pieces move the cost by amounts this page does not model. The second is timing: on October 21, 2026 the same ladder cost $771,217, so one session changed the cost by $6,362, 0.82% (our arithmetic). Lower yields mean a higher price for the same income.

T-bill rungs: the short end

Bill yields are the Treasury's coupon-equivalent rates for October 22, 2026; auction rates are the high investment rate of the latest auction of each term in the FiscalData file. Interest on $100,000 is the yield times days over 365 (our arithmetic). The 52-week auction in the file was held on September 29, 2026, so its rate is older than the others. A bill is sold at a discount and pays face value at maturity, and the IRS says you generally report that interest when the bill is paid at maturity (Publication 550), which can move income into the next tax year when a bill is bought in the autumn.

TIPS rungs: real yield, breakeven and the tax

A TIPS pays a fixed rate on a principal that moves with the Consumer Price Index, and at maturity you get the greater of the adjusted principal or the original principal (TreasuryDirect). The cash coupon in the table is the real yield times original par, before any inflation adjustment; it grows as the principal does. Breakeven is the inflation rate at which a same-maturity nominal Treasury and a TIPS would leave an investor in the same place before tax (our arithmetic: par yield minus real yield).

The tax works differently from a plain Treasury. You owe federal tax each year on the inflation increase of the principal, which you receive only at maturity:

The example is our arithmetic for year 1: a $100,000 10-year TIPS bought at a 2.64% real yield, coupon paid on principal raised by the assumed inflation, plus the principal increase reported as OID. The inflation rates are assumptions for the arithmetic, not forecasts. In a tax-deferred account the mismatch disappears, because there is no annual tax; whether a ladder sits in an IRA is a question for the account, not for this table.

The bank CD alternative and the FDIC limit

The FDIC national rates are averages of what insured banks and credit unions pay, weighted by each institution's share of domestic deposits; CD rates are an average of the $10,000 and $100,000 tiers. They are not the best rate you can find, and a high-yield online CD can sit well above them. What the table shows is the distance between the average and the Treasury curve, and that bank CD interest is not exempt from state income tax, while Treasury interest is.

The insurance limit sets how many banks a CD ladder needs. The FDIC covers $250,000 per depositor, per FDIC-insured bank, for each account ownership category, and deposits in the same category at the same bank are added together. For qualifying joint accounts, the interests of each co-owner are added together and the total is insured up to the standard maximum (12 CFR 330.9(b)).

The count ignores accrued interest, which also counts toward the limit while it sits in the account, and other ownership categories such as retirement accounts, which are insured separately. Treasuries are not FDIC products, since the FDIC lists stocks and bonds among the products it does not insure; they are direct obligations of the U.S. government.

What Treasury auctions have paid

Source: FiscalData auction results, selected fields, for auctions on or after April 1, 2026. The 10-year and 30-year rows are reopenings of older securities: the 10-year note was bought at 94.864 per $100 and paid a 4.625% coupon on a 5.300% yield. The par yield on that date was 5.28%, and on October 22 it was 4.96%.

Where the simple answer breaks

• Par is not price. A rung bought on the secondary market at a discount returns more than its coupon at maturity; one bought at a premium returns less. The rung table uses par.
• Reinvestment. The tables assume you spend the interest. A ladder that reinvests changes every later year.
• Rung gaps in TIPS. The Treasury has not issued a TIPS for every maturity year, so a TIPS ladder has gaps; the real curve starts at 5 years.
• One day matters. The 10-year par yield was 5.13% on October 21 and 4.96% on October 22, 2026.
• Other places the money could be. For a reader weighing sale proceeds, our capital-preservation comparison of real estate notes sets notes against a T-bill ladder before tax; the installment sale page covers spreading the gain; the annuity payout page prices guaranteed income from an insurer, and the state guaranty limit table shows the equivalent of the $250,000 cap for annuities.

What a reader can do with this

These are the questions the arithmetic raises, not recommendations.

• Write the income you need. The level-income table scales: halve the target and the cost is half of $777,579, other things equal.
• Check the date. Treasury publishes the curve each business day; the cost of the same ladder moved $6,362 in one session.
• Find your row. Pick your federal rate, add 3.8% if your modified adjusted gross income is over $200,000 (single) or $250,000 (joint), and read the after-tax column.
• Decide where TIPS would sit. The annual tax on the inflation adjustment is the cost of holding them in a taxable account.
• Count banks if CDs are involved. Divide the amount by $250,000 per ownership category.
• See the bracket your income lands in with the widow and single-bracket page if the filing status may change.

This is analysis of public documents, not investment, legal or tax advice. The person who can say what you owe is a CPA or tax attorney with your return.

FAQ

Sources, read and saved on October 23, 2026: U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates, Daily Treasury Real Yield Curve Rates and Daily Treasury Bill Rates, October 2026 (values for October 21 and 22); U.S. Treasury Fiscal Service, FiscalData auctions_query API (auctions from April 1, 2026); TreasuryDirect pages on Treasury bills, notes and TIPS; IRS Publication 550, Investment Income and Expenses; Rev. Proc. 2025-32 (IRS); 26 U.S.C. 1411 and 31 U.S.C. 3124 and 12 CFR 330.9 (Legal Information Institute, Cornell); FDIC, Deposit Insurance and Understanding Deposit Insurance, and FDIC National Rates and Rate Caps, October 2026 (rates as of October 19, 2026). Rung yields for years 4, 6, 8 and 9, ladder costs, after-tax figures, breakevens and TIPS tax examples are CrowdfundedWealth arithmetic.