Comparing EE and I bonds — TreasuryDirect (2024)

Current interest rates

(for bonds you buy November 1, 2023 to April 30, 2024 )

2.70%
(stays same at least 20 years) 5.27%
(stays same for 6 months) How do the bonds earn interest? EE bonds you buy now have a fixed interest rate that you know when you buy the bond.

That rate remains the same for at least the first 20 years. It may change after that for the last 10 of its 30 years.

We guarantee that the value of your new EE bond at 20 years will be double what you paid for it.

(If you have an EE bond from before May 2005, it may be earning interest at a variable rate. See more at EE bonds.)

I bonds earn a rate that can change every 6 months. The rate is a combination of:
  • a fixed interest rate
  • and
  • an inflation rate that we calculate twice a year (November, May)

We guarantee that the interest rate of an I bond will never fall below zero.

How often do the bonds for sale today earn interest? Both EE and I savings bonds earn interest monthly. Interest is compounded semiannually, meaning that every 6 months we apply the bond’s interest rate to a new principal value. The new principal is the sum of the prior principal and the interest earned in the previous 6 months.

Thus, your bond's value grows both because it earns interest and because the principal value gets bigger.

EE and I bonds earn interest until the first of these events: You cash in the bond or the bond matures – reaches the end of its 30-year term. (If you cash in the bond before 5 years, you lose 3 months interest.)

If you have an electronic bond, you can see what it is worth in your TreasuryDirect account.

To see what your paper bond is worth, use our Savings Bond Calculator.

Must I pay tax on what the bond earns? The tax situation is the same for both EE and I bonds.

Federal income tax: Yes

State and local income tax: No

Federal estate, gift, and excise taxes; state estate or inheritance taxes: Yes

For federal income tax, you choose whether to report earnings each year or wait to report all the earnings when the bond finishes earning interest (or when you cash it if you cash it before the end of its 30 year life).

If you use the money for qualified higher education expenses, you may not have to pay tax on the earnings.

See more in

Tax options for EE and I savings bonds Using savings bonds money for higher education

Are the bonds electronic or on paper? New EE bonds are electronic only.

You may own paper EE bonds issued before 2012.

New I bonds can be electronic or on paper.

The only way to buy paper I bonds now is by using your IRS tax refund.

You may own paper I bonds issued before 2012 that you bought at a bank or through payroll savings.

How much does a paper I bond cost? The smallest paper I bond costs $50. Other options for paper I bonds: $100, $200, $500, $1,000.

(You can split your tax refund, spending some on paper I bonds and sending the rest to your bank account.)

How much does an electronic bond cost? You can buy an electronic EE or I bond for any amount from $25 to $10,000. You can specify the amount to the penny. For example, you could buy an electronic bond for $50.23. Where do I keep electronic bonds? In our online program, TreasuryDirect.

Learn about TreasuryDirect Open a TreasuryDirect account

What's the most I can spend on EE or I bonds? In any one calendar year for one Social Security Number, you may buy up to:
  • $10,000 in electronic EE bonds
  • $10,000 in electronic I bonds, and
  • $5,000 in paper I bonds (with your tax refund)
How soon can I cash in the bond? After 12 months.

However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest.

Comparing EE and I bonds — TreasuryDirect (2024)

FAQs

Which is better, EE bonds or I bonds? ›

Bottom line. I bonds, with their inflation-adjusted return, safeguard the investor's purchasing power during periods of high inflation. On the other hand, EE Bonds offer predictable returns with a fixed-interest rate and a guaranteed doubling of value if held for 20 years.

Is a high yield savings account better than a Series I bond? ›

Fees: I bonds don't have monthly fees. Although there are fee-free savings accounts, some HYSAs do charge monthly fees. Rates: The rate of an HYSA can change as market conditions fluctuate. With I bonds, there is a fixed rate of interest and a rate that's tied to inflation, so they provide more surety.

What is the downside to I bonds? ›

Key Points. Pros: I bonds come with a high interest rate during inflationary periods, they're low-risk, and they help protect against inflation. Cons: Rates are variable, there's a lockup period and early withdrawal penalty, and there's a limit to how much you can invest.

Do EE bonds really double in 20 years? ›

EE bonds you buy now have a fixed interest rate that you know when you buy the bond. That rate remains the same for at least the first 20 years. It may change after that for the last 10 of its 30 years. We guarantee that the value of your new EE bond at 20 years will be double what you paid for it.

Why would anyone buy EE bonds? ›

Series EE savings bonds are a low-risk way to save money. They earn interest regularly for 30 years (or until you cash them if you do that before 30 years). For EE bonds you buy now, we guarantee that the bond will double in value in 20 years, even if we have to add money at 20 years to make that happen.

Can I buy $10,000 i bond every year? ›

That said, there is a $10,000 limit each year for purchasing them. There are several ways around this limit, though, including using your tax refund, having your spouse purchase bonds as well and using a separate legal entity like a trust.

What is the downside of a high-yield savings account? ›

The cons of high-yield savings accounts

Interest rates on high-yield savings accounts are variable and can fluctuate at any time, so while a bank may advertise a high annual percentage yield (APY) when you apply, it likely won't last forever.

What is a better investment than I bonds? ›

Bottom line. If inflation and investment safety are your chief concerns — TIPS and I-bonds deliver both. TIPS offer greater liquidity and the higher yearly limit allows you to stash far more cash in TIPS than I-bonds.

What is the advantage of investing $20000 in a Series I US savings bond? ›

Series I Bond Benefits

The variable inflation rate component of the bond's interest rate is adjusted semi-annually based on changes in the CPI. This means that as inflation rises, the interest rate on I Bonds also increases, helping to preserve the real value of your investment over time.

Can you ever lose money on an I bond? ›

You can count on a Series I bond to hold its value; that is, the bond's redemption value will not decline. Question: What is the inflation rate? November 1 of each year. For example, the earnings rate announced on May 1 reflects an inflation rate from the previous October through March.

Is it possible to lose money on I bonds? ›

“With I bonds, your principal is protected and safe. However, if you cash the bond out before five years, then you will lose up to the last three months of accrued interest.

Why are series I bonds not good? ›

Further, I-bonds must be held for at least a year, so you won't be able to cash them out before a year is up if the rate plunges due to falling inflation. In fact, you'll lose the last three months of interest if you redeem them before five years are up.

What are the disadvantages of TreasuryDirect? ›

Securities purchased through TreasuryDirect cannot be sold in the secondary market before they mature. This lack of liquidity could be a disadvantage for investors who may need to access their investment capital before the securities' maturity.

How much is a $100 series EE bond worth after 30 years? ›

How to get the most value from your savings bonds
Face ValuePurchase Amount30-Year Value (Purchased May 1990)
$50 Bond$100$207.36
$100 Bond$200$414.72
$500 Bond$400$1,036.80
$1,000 Bond$800$2,073.60

Do you pay taxes on I bonds? ›

More about savings bonds

The interest earned by purchasing and holding savings bonds is subject to federal tax at the time the bonds are redeemed. However, interest earned on savings bonds is not taxable at the state or local level.

How much is a $100 EE savings bond worth after 30 years? ›

How to get the most value from your savings bonds
Face ValuePurchase Amount30-Year Value (Purchased May 1990)
$50 Bond$100$207.36
$100 Bond$200$414.72
$500 Bond$400$1,036.80
$1,000 Bond$800$2,073.60

What is the best savings bond to buy today? ›

9 of the Best Bond ETFs to Buy Now
ETFExpense ratioYield to maturity
Global X 1-3 Month T-Bill ETF (CLIP)0.07%5.5%
SPDR Portfolio Corporate Bond ETF (SPBO)0.03%5.5%
JPMorgan Ultra-Short Income ETF (JPST)0.18%5.5%
iShares 7-10 Year Treasury Bond ETF (IEF)0.15%4.4%
5 more rows
Apr 8, 2024

How long should you hold series I bonds? ›

You can cash in (redeem) your I bond after 12 months. However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest.

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