The TSP G Fund pays 4.875% for August 2026. The rate resets every month and equals the average yield on all outstanding U.S. Treasury marketable securities with four or more years to maturity. It is the only fund in the Thrift Savings Plan that guarantees your principal against loss.
Key takeaways
- The G Fund rate for August 2026 is 4.875%, set monthly by the U.S. Treasury under the Thrift Savings Plan Act.
- The rate equals the weighted average yield of outstanding Treasury marketable securities with 4 or more years to maturity, so you earn long-bond-style yields.
- Principal never drops. The G Fund has never posted a negative return and, by statute, never will.
- It is available only to federal civilian employees and uniformed service members through the TSP.
- During debt-ceiling standoffs the Treasury can suspend (disinvest) the G Fund, but participants are made whole by law once the limit is raised.
What the G Fund is
The G Fund, formally the Government Securities Investment Fund, is one of the core investment options inside the Thrift Savings Plan, the federal government's version of a 401(k). It is open only to federal employees and members of the uniformed services.
The fund invests in short-term, nonmarketable U.S. Treasury securities that are specially issued to the TSP and to no one else. Because these securities are issued and redeemed at par, the daily share price cannot fall. That is the mechanical reason your balance never loses value from market moves.
How the G Fund interest rate is set
The rate is not chosen by TSP managers or tied to the federal funds rate. It is fixed by statute. Under the Thrift Savings Plan Act, the Treasury calculates the G Fund rate each month as the average yield on all outstanding Treasury marketable securities with four or more years remaining to maturity.
That single rule produces the fund's signature trait: it pays a yield tied to longer-dated Treasuries while behaving like a money market account on the downside. You capture long-bond income without the price risk that hits an actual long bond when yields rise.
| G Fund mechanic | How it works |
|---|---|
| Rate benchmark | Average yield of outstanding Treasury marketable securities with 4+ years to maturity |
| Reset frequency | Recalculated monthly; the August 2026 rate is 4.875% |
| Underlying holdings | Nonmarketable special-issue Treasury securities issued only to the TSP |
| Earnings accrual | Interest accrues daily and compounds |
| Principal risk | None; the share price cannot decline |
| Credit backing | Full faith and credit of the U.S. government |
Why the G Fund is unique
No product in the private market replicates the G Fund. A retail investor who wants Treasury-backed safety typically buys T-bills or a money market fund and accepts short-term yields. An investor who wants long-Treasury yields buys a bond fund and accepts price swings when rates move.
The G Fund gives federal participants both sides at once: a yield pegged to longer maturities and a share price that cannot fall. Compared with the average savings account interest rate history, which has spent much of the past two decades below 1%, the G Fund has paid materially more while carrying no principal risk. It has never recorded a negative annual return, and the design guarantees it never can.
G Fund vs. F Fund vs. C Fund
The G Fund is the conservative anchor of the TSP. It is easiest to understand next to the two funds federal employees most often weigh against it.
| Fund | What it holds | Principal risk | Role in a portfolio |
|---|---|---|---|
| G Fund | Special-issue Treasury securities | None; cannot lose value | Capital preservation, stability, cash-like reserve |
| F Fund | Broad U.S. bond index (government and corporate) | Yes; price falls when rates rise | Bond market exposure and income |
| C Fund | S&P 500 stock index | Yes; full equity volatility | Long-term growth |
The distinction that matters most is between the G Fund and the F Fund. Both are fixed income, but only the G Fund is immune to rising rates. When yields climb, the F Fund can post losses as bond prices fall, while the G Fund simply resets to a higher rate the following month with no hit to principal. That is why many federal investors treat the G Fund as the safe ballast and lean on the C Fund for growth.
The debt-ceiling wrinkle
There is one recurring headline worth understanding. During a debt-ceiling standoff, the Treasury Secretary is authorized to suspend, or "disinvest," the G Fund to free up room under the statutory borrowing limit. This has happened repeatedly, including in 2023 and 2025.
For participants, the practical impact is close to zero. The G Fund keeps accruing earnings during the suspension, and once Congress raises or suspends the debt limit, the fund is restored in full as if the disinvestment never occurred. Federal law requires that participants be made whole, so account values and interest are protected throughout.
Where the G Fund fits
The G Fund works best as a foundation rather than a whole strategy. Its stability is unmatched, but a portfolio built entirely on it may not outpace inflation over a long career the way stock exposure can. Many participants pair a G Fund core with the C or S Funds for growth, shifting more toward the G Fund as retirement approaches.
If you want to think through the rate environment ahead, our 10-year interest rate forecast covers where longer Treasury yields may head, which is exactly what drives the G Fund's future payout. For the broader picture on how benchmark rates move, see our interest rates hub, and for retirement account strategy across your full plan, start with the retirement planning hub.
The G Fund will not make you rich on its own. What it does is rare: it pays a respectable, government-backed yield while removing the one thing most fixed-income investors fear, the risk of losing principal.
Frequently asked questions
How is the TSP G Fund interest rate set?
The G Fund rate is fixed by statute, not chosen by TSP managers or tied to the federal funds rate. Under the Thrift Savings Plan Act, the Treasury calculates it each month as the average yield on all outstanding Treasury marketable securities with four or more years remaining to maturity. This lets it pay long-bond-style yields while behaving like a money market account on the downside.
Can the G Fund lose money?
No, the G Fund cannot lose value. It invests in nonmarketable special-issue Treasury securities issued and redeemed at par, so the daily share price cannot fall. It has never posted a negative return and, by statute, never will. That principal guarantee, backed by the full faith and credit of the US government, is what makes it unique among TSP funds.
What is the difference between the G Fund and the F Fund?
Both are fixed income, but only the G Fund is immune to rising rates. The F Fund holds a broad US bond index and can post losses when rates rise and bond prices fall. The G Fund simply resets to a higher rate the following month with no hit to principal. That is why federal investors treat the G Fund as safe ballast.
What happens to the G Fund during a debt-ceiling standoff?
During a debt-ceiling standoff, the Treasury Secretary can suspend, or disinvest, the G Fund to free up room under the borrowing limit, as happened in 2023 and 2025. For participants the impact is close to zero: the fund keeps accruing earnings during the suspension, and once the limit is raised it is restored in full. Federal law requires participants be made whole.