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Comparing Series EE and Series I Savings Bonds

Treasury currently offers two series of savings bonds:  EE and I. You can buy both EE bonds and I bonds in electronic format.  You can buy paper I bonds with your IRS tax refund.

 

EE bonds

I bonds

Purchase price for paper bonds

  • Paper EE bonds are no longer available

 

  • Paper I bond can be purchased with your IRS tax refund at face value (a $50 bond costs $50)

Purchase price for electronic bonds

Electronic EE and I bonds are sold at face value.

Denominations available electronically

Any amount of $25 or more to the penny. For example, you could buy an EE or an I bond for $50.23.

Interest earnings (electronic and paper are the same)

Interest depends on when the EE bond was issued:

  • EE bonds issued from May 2005 earn a fixed rate of return.
  • EE bonds issued from May 1997 through April 2005 earn variable rates based on 90% of the six-month average of 5-year Treasury Security yields.

I bonds earn a combined rate made up of

  • a fixed rate of return known when you buy the bond, and
  • an inflation rate that we calculate twice a year (May and November) based on the CPI-U

Maximum amount you can buy

In any one calendar year for one Social Security Number: You may buy up to $10,000 in electronic EE bonds, up to $10,000 in electronic I bonds, and up to $5,000 in paper I bonds with your tax refund.

When interest is earned and compounded

Interest is earned monthly and compounded semiannually up to 30 years.

When bonds can be redeemed (cashed)

After 12 months

Penalty for cashing early

Loss of last three months of interest if you redeem the bond during the first five years. For example, if you redeem the bond after 18 months, you get the first 15 months of interest.

Income Taxes

When bonds are redeemed, interest income is taxable at the federal level only. There are no state or local income taxes.

Tax benefits may be available when you use the money for higher education. Education Planning.

Also see:

(Note: Before Series EE savings bonds, we issued Series E savings bonds. All E bonds have matured.)