Treasury Bill Account With Direct Indexing: Best Platforms

Four US platforms let you hold a Treasury product and a direct index under one login: Frec, Wealthfront, Public and Charles Schwab (Fidelity also qualifies if a core money market position next to Managed FidFolios at 0.40% is enough). For most people the choice comes down to Wealthfront or Frec. Wealthfront pairs a 0.09% S&P 500 direct index from $5,000 with a Treasury money market fund (WLTXX) and a Treasury bond ladder at 0.15%. Frec pairs a 0.09% direct index from $20,000 with Frec Treasury at 0.20%, inside the same brokerage account. Public is the cheapest way in at $1,000 for both, and Schwab only makes sense above $100,000.

The reason to want both in one place is practical. Most people shopping for direct indexing also have a large cash balance waiting on the sidelines: a bonus, an RSU sale, the proceeds of a house, money earmarked for an index they have not funded yet. Where that cash sits decides two things. The first is how quickly it can move into the index when you are ready. The second, which most comparisons skip, is whether your state taxes the interest it earns.

Everything here is educational. We build index construction and backtesting software, we do not manage money, hold cash or give tax advice. Yields and fees are from each provider's own pages and filings, read in September 2026, and yields move every week.

Which platforms offer a Treasury account and direct indexing in the same account?

Two things jump out. Frec and Wealthfront charge the same headline fee on the S&P 500 index, so the cash side is where they actually differ. And Betterment, which often appears in these comparisons, has no retail direct indexing product at all; its advisor platform lists direct indexing on a roadmap.

Does Frec Treasury or Wealthfront's Cash Account pay more after tax?

Before state tax they are close to a tie. Frec's best Treasury option showed 3.56% on September 25, 2026, already net of its 0.20% fee. Wealthfront's Cash Account paid a base 3.55% APY and its Treasury fund WLTXX a 3.53% 7-day SEC yield. A few hundredths of a percent is noise that will reverse next week.

After state tax they are not a tie, because they are different kinds of income. The Wealthfront Cash Account is a sweep into program banks, and its interest is ordinary bank interest that your state taxes like any savings account. Treasury interest is different. IRS Publication 550 says it plainly: "Interest income from Treasury bills, notes, and bonds is subject to federal income tax but is exempt from all state and local income taxes." Wealthfront says of WLTXX that its dividends "are generally exempt from state and local taxes".

Here is what that is worth on $100,000 of cash for a California resident in the 9.3% bracket:

That is about $310 a year for choosing the right bucket inside the same app, which is more than the entire annual fee on a $100,000 S&P 500 direct index at 0.09% ($90). In other high-tax states such as New York and New Jersey it is of a similar order for similar brackets. In a state with no income tax, such as Texas or Florida, it disappears and you should simply take the higher yield.

Is a Treasury money market fund exempt from state tax?

Usually, but not automatically, because a fund pays dividends rather than interest. Publication 550 notes that "amounts you receive from money market funds should be reported as dividends, not as interest," and each state decides how much of that dividend passes through the federal exemption. California's rule is the strictest well-known one: "If the mutual fund has at least 50% of its assets invested in tax-exempt U.S. obligations and/or in California or its municipal obligations, that amount of dividend is exempt from California tax." A fund that holds only Treasury bills clears that easily. A government money fund stuffed with repurchase agreements may not.

For Frec Treasury, check the specific fund you are placed in. Frec describes its options as "low risk US treasury mutual funds" and its Form ADV says the strategy "invests cash into certain money market funds," but which funds, and what share of their income comes from US obligations, is something to confirm in the account before you count on the exemption. Your 1099-DIV from the fund company, or its year-end supplemental statement, shows the percentage. When you file, that figure is the one your state return subtracts, so it is worth having a tool that can read your 1099-DIV and 1099-INT forms and carry the US-obligation share through to the state return instead of leaving the exemption unclaimed.

Can I move money from Treasury into a direct index on the same platform?

Yes on all four, with different amounts of friction. Frec runs both inside a single brokerage account and lists "a direct index strategy" and "a treasury strategy" as parts of one portfolio allocation, which is the tightest integration of the group. It is not instant: Frec's help center notes that money market redemptions "settle the next business day," so proceeds are not available for same-day reinvestment. Wealthfront keeps them as separate accounts under one login and says you can move cash to an investing account "in minutes." Public keeps everything under one app as well. Schwab's Personalized Indexing is a separately managed account, so funding it is a transfer into a managed account rather than a click inside one.

If the reason you are holding cash is that you have not decided which index to fund, that one-day settlement does not matter much. What matters is deciding. Building the index you are considering in the studio above and backtesting it against the S&P 500 costs nothing while the cash earns 3.5% somewhere safe.

What is the best Treasury bill account for a direct indexing investor?

It depends on your balance and your state.

Under $5,000: Public is the only one of the four that opens both a Treasury Account and a direct index at $1,000. Be realistic about what $1,000 buys in a direct index; Public itself warns that it "may only enable you to track some, but not all, of a particular benchmark index's stocks." Its Treasury Account fee starts at 0.29% on the first $25,000, the highest here at small sizes.

$5,000 to $20,000: Wealthfront. S&P 500 Direct opens at $5,000 for 0.09%, and inside the Cash Account you can choose WLTXX for state-exempt Treasury income or the bank sweep for FDIC coverage. If you want a ladder of actual Treasury securities rather than a fund, its Automated Bond Ladder costs 0.15% with a $500 minimum.

$20,000 and up: Frec becomes a genuine alternative and the choice turns on the index, not the cash. Frec offers 25 indexes against Wealthfront's two S&P 500 and Nasdaq-100 options at this size, and keeps Treasury and the direct index inside one account. Frec's 0.20% Treasury fee and WLTXX's 0.25% expense ratio are close enough that the net yield shown in each app on the day you move money matters more than the fee line. Our Frec direct indexing review has every strategy fee and minimum, and the Wealthfront direct indexing fees and minimums page covers both of its products.

$100,000 and up, and already at Schwab: Schwab's Treasury money funds are cheap and liquid, but Personalized Indexing at 0.40% costs $310 more a year on $100,000 than a 0.09% index, which is about the same size as the state tax you were trying to save. Only pay it if you want Schwab's customization or its human support.

Can I borrow against the direct index instead of holding cash?

Some people hold a cash buffer only because they are afraid of having to sell index positions at a gain when they need money. Frec and Wealthfront both offer a portfolio line of credit secured by the taxable account, which is another way to meet that need without keeping as much idle cash. The rates and loan-to-value limits differ, and borrowing carries margin-call risk that a Treasury fund does not. We compared them in the best brokerages for borrowing against a direct indexing portfolio.

What to check before you move the cash

1. What the Treasury product actually holds. Direct Treasuries (Public's ladder, Wealthfront's Bond Ladder), a Treasury-only money fund (WLTXX, SNSXX) or a bank sweep. Only the first two carry the state exemption.
2. The yield net of every fee. Frec shows its rate net of the 0.20% fee. Fund yields are net of the expense ratio. Public's ladder has both a management fee and markups on par.
3. Your state's rule for fund dividends. California requires 50% of the fund's assets in US obligations. Check your state's return instructions for the equivalent.
4. The direct index minimum for the index you actually want. Frec's minimum is $20,000 for its S&P 500 strategy and $50,000 for its total market strategy. Our direct indexing minimums by platform table lists every one.
5. Whether the index is worth funding at all. Model it, backtest it against what you already own, and see whether the exposure is different enough to justify the fee.