IB01 vs SGOV: Choosing a Short-Term USD Treasury ETF, with Yields, Taiwan Tax, U.S. Estate Tax and IBKR

IB01 and SGOV are both ETFs for earning ultra-short U.S. Treasury yields. In the September–October 2026 rate environment the gap in return between them was small. What really separates them is three things: accumulating versus distributing, Irish versus U.S. domicile, and your own tax residency.

This post is written for a Taiwan tax resident who uses a U.S. broker today (Firstrade, for example) and is considering Interactive Brokers (IBKR).

The short answer: in September–October 2026 both returned around 4%, and on US$100,000 the difference was only about US$300 a year. For a Taiwan tax resident who is a U.S. nonresident, IB01’s Irish domicile and accumulating structure may be more attractive; SGOV is extremely liquid and pays monthly. Once you become a U.S. tax resident, IB01 needs to be rechecked for PFIC issues.

This post is personal research and notes, not investment, legal or tax advice. Cross-border tax depends on nationality, domicile, tax residency, visa, days in the U.S., account type, broker entity, asset type and the year’s rules. Yields, broker cash rates, ETF distributions and QII percentages all change; the figures here are snapshots from around 7 October 2026.

IB01 and SGOV in one table

BlackRock’s IB01 data (24 September 2026): weighted average maturity 0.33 years, effective duration 0.31 years. SGOV’s data (1–2 October 2026): monthly distributions, NAV about US$100.43.

How the return reaches your account

IB01: accumulating in the NAV

The fund collects the Treasury interest, reinvests it inside the fund, and the result shows up in the ETF’s NAV. You don’t receive monthly cash distributions, so IB01 needs no dividend reinvestment setting. If you buy US$100,000 and the position later grows to US$104,000, what you see is a bigger holding, not a monthly dividend landing in your account.

SGOV: monthly distributions

The return from 0–3 month Treasury bills is paid to your brokerage account as a monthly distribution. BlackRock’s 2026 distribution records:

So you can’t judge SGOV’s return by whether the price went up; you have to include distributions in the total return.

Interest builds up in SGOV’s NAV every day, so the price creeps up between distributions and steps down on the ex-dividend date when the payout goes out, which looks like a sawtooth. In other words, if you sell before the distribution, the interest accrued so far is broadly reflected in the price you get. IB01 has no ex-dividend step, so its price line is smoother.

How much do the yields differ? Start with the definitions

IB01 publishes a weighted average YTM, which reflects the yield of the bond portfolio it holds now and does not guarantee next year’s total return. SGOV’s 30-day SEC yield is a standardized measure for U.S. funds, and its 12-month trailing yield reflects past distributions.

Because the definitions differ, 4.16% and 3.70% are not a precise 0.46% gap in future returns. A safer way to put it: in the short-rate environment of September–October 2026, both were around 4%, and IB01, which can hold bonds out to one year, had a slightly higher portfolio yield at the time.

Roughly, on US$100,000, 4.0% is about $4,000 a year and 3.7% about $3,700, a gap of about $300. That gap keeps moving with Federal Reserve policy, T-bill yields, the yield curve and the funds’ rollovers.

Why IB01’s yield may have been slightly higher

The difference is maturity. SGOV’s bills mature quickly and are reinvested at the latest short-term rates, while IB01 can hold somewhat longer Treasuries. When rates fall, SGOV’s portfolio yield usually drops faster and IB01 keeps a little more of the yield it locked in earlier; when short rates jump, SGOV picks up the higher rates faster. It isn’t that IB01 always yields more; they are positioned at different maturities.

Cross-border tax: Taiwan overseas income, U.S. withholding and estate tax

Tax is where the two differ most, and the Taiwan side and the U.S. side need to be looked at separately.

Taiwan tax residents: IB01 is not “capital gains tax-free”

IB01’s return accumulates mostly in the NAV, and the overseas income you realize when you later sell it is still assessed under Taiwan’s alternative minimum tax rules:

• If a household’s overseas income for the year is below NT$1 million, it is not included in basic income.
• At NT$1 million or more, all of it is included, not just the part above the threshold.
• With basic income at or below NT$7.5 million, there is in principle no basic tax.
• Above that, basic tax = (basic income − NT$7.5 million) × 20%, which is then compared with regular income tax, with credits for qualifying foreign tax paid.

So IB01’s more accurate advantage is that the return accumulates in the NAV and is realized only when you sell, which gives you more control over the timing. Saying “IB01’s capital gains are tax-free in Taiwan” is not accurate.

Is SGOV’s distribution always hit with 30% U.S. withholding?

Not necessarily. U.S.-source dividends paid to nonresident aliens commonly face 30% withholding, but the IRS has exceptions for some fund distributions. The Form 1040-NR instructions say interest-related dividends from a mutual fund generally qualify as an exception to the 30% tax for a nonresident alien.

SGOV holds almost only U.S. Treasury bills, and BlackRock publishes NRA qualified interest income (NRA-QII) data for it. How much is actually withheld depends on:

1. What share of each distribution the fund designates as NRA-QII
2. Whether your broker applies QII correctly
3. Whether your W-8BEN is valid
4. Whether you are still a nonresident alien

Check the QII share in the latest tax information for each year and each distribution; don’t assume it is always 100%.

SGOV’s easily overlooked U.S. estate tax

SGOV is a U.S.-domiciled ETF. The IRS estate tax rules for nonresidents not citizens cover U.S.-situated assets, which can include U.S. marketable securities; with U.S.-situated assets above US$60,000, a Form 706-NA filing may be required. The US$60,000 is a filing threshold and is not adjusted for inflation. (See also the IRS FAQ.)

So a non-U.S. investor holding a lot of U.S.-domiciled ETFs should weigh U.S. estate tax alongside yield, expense ratio and withholding. IB01 is an Irish-domiciled UCITS ETF, so its estate-tax situs structure differs from holding U.S.-domiciled SGOV directly.

After moving to the U.S., the answer may change completely

Living in the U.S. does not automatically make you a U.S. tax resident. But once you become one, IB01 needs another look.

IB01 is a foreign fund. For a U.S. person, foreign pooled investment products are quite likely to be PFICs (passive foreign investment companies). Under the Form 8621 rules, a U.S. person who directly or indirectly holds a PFIC may need to file Form 8621 in certain situations and under the annual reporting rules, and the tax and filing burden can be far heavier than holding U.S. ETFs.

• Taiwan tax resident and U.S. nonresident: IB01 can make a lot of sense.
• Once a U.S. tax resident: reassess IB01 for PFIC; SGOV, T-bills or U.S. money market products may be the more natural fit.

F-1 students are an important exception

If you go to the U.S. on an F-1 student visa, you can’t just apply the “more than 183 days in the U.S.” rule. The IRS substantial presence test has exempt-individual rules for students in F, J, M or Q status: eligible students can exclude certain days of presence, usually under a five-calendar-year rule, and generally need to file Form 8843.

So the order to work through after moving is: visa type → past F/J/M/Q history → days in the U.S. this year → substantial presence test → U.S. tax resident or nonresident → only then decide whether IB01 still fits.

Holding at IBKR: commissions, idle cash and dividend reinvestment

SGOV bought at Firstrade and SGOV bought at IBKR is the same ETF, with the same NAV, distributions, expense ratio and fund yield. The differences are at the broker: commissions, FX, account features, dividend reinvestment, interest on idle cash, tax reporting and withholding, and trading permissions. IB01 trades in US dollars on the London Stock Exchange, so you need a broker like IBKR that can trade in London.

Commissions

IBKR Pro is not commission-free for U.S. stocks and ETFs. Per IBKR’s pricing (October 2026):

IBKR Lite offers commission-free U.S. stocks and ETFs, but eligibility depends on where the account is held and where you live, so don’t assume every international client can use it.

With SGOV at about US$100 a share, US$100,000 buys about 1,000 shares, and the Tiered base commission is about 1,000 × 0.0035 = US$3.50, or 0.0035%. For a large position you hold, that is very small.

Interest on idle cash: the first US$10,000 earns nothing

Per IBKR’s interest rate page (7 October 2026), with account NAV above US$100,000, USD cash above US$10,000 earns about 3.13% a year and the first US$10,000 earns 0%; with NAV below US$100,000 the rate is lower. Interest accrues daily and is posted monthly, usually on the third business day of the following month, and the rate can change.

So you can’t simply say “IBKR pays 3.13% on cash.” For example, with NAV above US$100,000 and US$50,000 in cash:

• First US$10,000: 0%
• Remaining US$40,000 × 3.13% ≈ US$1,252 a year
• Across the whole US$50,000: 1,252 ÷ 50,000 ≈ 2.50%

A few thousand dollars kept as a trading buffer makes sense as cash. If it is US$50,000, US$100,000 or US$200,000 that you won’t need for months, it is worth comparing IBKR cash, SGOV, IB01 (if your tax status suits it) and buying T-bills directly.

Dividend reinvestment

IBKR offers dividend reinvestment (Dividend Election), set under Settings → Trading → Dividend Election in Client Portal. Per IBKR’s guide: it is available only at supported IBKR entities, eligible securities are limited by product and market, reinvestment purchases are charged the usual commission, and dividends may not be reinvested if a margin deficit would prevent opening a new position. So IBKR’s reinvestment is not necessarily free.

By comparison, Firstrade’s dividend reinvestment plan (DRIP) is free. If all you want is commission-free U.S. ETFs and free DRIP, Firstrade really is simple; IBKR’s strengths are global market access, multiple currencies, UCITS ETFs, FX, Treasuries and bonds, and managing assets across markets at one broker.

IB01, being accumulating, never has a “receive a dividend and buy more” step, so it needs no reinvestment.

Moving from Firstrade to IBKR: no need to sell

U.S. brokers can move holdings directly through ACATS (Automated Customer Account Transfer Service). Eligible securities such as AAPL, VOO or SGOV can move to IBKR as they are, without selling everything, withdrawing, wiring and buying again, which matters especially for positions with unrealized capital gains.

If you have decided to consolidate at IBKR, one full transfer at US$75 is usually more sensible than several partial transfers at US$55 each.

Changing brokers and your tax residency are separate questions, so there’s no need to wait until you move to the U.S. A cleaner order is to open IBKR, confirm the account entity and trading permissions, make sure money moves in and out without problems, and do one full transfer once you’re sure you’ll stay. Whether to buy IB01 or SGOV is a separate decision based on your tax residency that year.

(I wrote up how I moved my RSUs from Morgan Stanley to Firstrade in Transferring RSU shares to Firstrade.)

How to choose: IB01, SGOV or broker cash

Is IB01 always better than SGOV?

No; it depends on your status and what the money is for. For a Taiwan tax resident who is also a U.S. nonresident:

Splitting your dollars into three layers

Quick comparison

For short Treasuries compared with USD deposits, USDT lending and DeFi on opportunity cost, see Where to park idle USD and USDT.

FAQ

Which has the higher yield, IB01 or SGOV?

On 24 September 2026 IB01's weighted average YTM was 4.16%, and on 1 October SGOV's 30-day SEC yield was 3.70%. The two measures differ, so this is not a 0.46% return gap; roughly, at 4.0% and 3.7%, US$100,000 earns about US$300 a year more.

Are IB01's capital gains tax-free in Taiwan?

That is not accurate. IB01 accumulates its income in the NAV, and when a Taiwan tax resident sells, the overseas income is still assessed under Taiwan's overseas income and alternative minimum tax rules. Its advantage is that you choose when to realize the gain.

Is SGOV's distribution always subject to 30% U.S. withholding?

Not necessarily. SGOV holds almost only U.S. Treasury bills, and the part of a distribution designated as NRA qualified interest income (QII) may qualify for the exception to the 30% tax for nonresident aliens. The actual share follows BlackRock's tax information for the year and your broker's withholding.

Do non-U.S. investors holding SGOV need to think about U.S. estate tax?

Yes. SGOV is a U.S.-domiciled ETF, and the IRS says nonresident non-citizens with U.S.-situated assets above US$60,000 may need to file Form 706-NA. IB01 is an Irish-domiciled UCITS ETF with a different situs structure.

Can I still hold IB01 after moving to the U.S.?

What matters is whether you become a U.S. tax resident, not whether you live in the U.S. Once you are a U.S. tax resident, a foreign fund like IB01 may be a PFIC with much more complex filing, so it needs a fresh look; F-1 students have special rules that exclude some days of presence.

Do I have to sell my holdings to move from Firstrade to IBKR?

Usually not. U.S. brokers can move holdings directly through ACATS. Firstrade charges US$75 for a full transfer out and US$55 for a partial one, and IBKR charges nothing to transfer in or out.