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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  EE bonds and I bonds in electronic format in TreasuryDirect.  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 bonds 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 in May 2005 and after earn a fixed rate of return.
  • EE bonds issued from May 1997 through April 2005 earn variable rates.

I bonds earn a rate derived from:

  • a fixed rate of return known when you buy the bond, and
  • an inflation rate that we calculate twice a year

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, using your tax refund, up to $5,000 in paper I bonds.

When interest is earned and compounded

Interest is earned monthly and compounded semiannually until the bonds reach 30 years or until you cash them, whichever comes first.

When bonds can be cashed (redeemed)

After 12 months

Penalty for cashing early

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

Income Taxes

Income tax applies at the federal level, but not the state and local levels. Report interest on your federal return either every year or for the year when the first of these things happens: the bond matures, you cash the bond, or you give up ownership of the bond and it is reissued.

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

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