Comparing EE and I bonds — TreasuryDirect (2024)

Current interest rates

(for bonds you buy May 1, 2024 to October 31, 2024 )

2.70%
(stays same at least 20 years) 4.28%
(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

What's 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.

What is the downside of an I bond? ›

Cons of Buying I Bonds

I bonds are meant for longer-term investors. If you don't hold on to your I bond for a full year, you will not receive any interest. You must create an account at TreasuryDirect to buy I bonds; they cannot be purchased through your custodian, online investment account, or local bank.

Is there anything better than I bonds? ›

TIPS offer greater liquidity and the higher yearly limit allows you to stash far more cash in TIPS than I-bonds. If you're saving for education, I-bonds may be the way to go.

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.

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 convert an EE bond to an I bond? ›

Therefore, when you cash in your series EE bonds, you can simply use the proceeds to purchase I Bonds, he said. When you cash in your EE bonds, you will pay federal but not state income taxes on the interest portion of the redemption, he said.

Can you ever lose money on an I bond? ›

Answer: No. In periods of deflation, the bond's redemption value won't decline.

Are I bonds a good investment in 2024? ›

June 2024 I Bond Fixed Rate is 1.30%!

If you liked having I Bonds and matching inflation then you might love having I Bonds that beat inflation over the next 30 years. The current fixed rate of 1.30% is one of the best fixed rates in the past 21 years.

What is the I bond rate for May 2024? ›

The 4.28% composite rate for I bonds issued from May 2024 through October 2024 applies for the first six months after the issue date. The composite rate combines a 1.30% fixed rate of return with the 2.96% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U).

Can I buy $10,000 worth of I bonds every year? ›

Paper I bonds are only available in multiples of $50.” There are also limits on how many I bonds you can buy each year. Individual purchase limits for I bonds are $15,000 per calendar year — $10,000 worth of electronic I bonds and $5,000 worth of paper I bonds.

Are CDs better than I bonds? ›

Advantages of CDs

I bond yields reset every six months, depending on inflation. But with CDs, you can lock in the same yield for five years, or even longer if you want. And depending on the state of inflation and consumer interest rates, you may be able to find CDs with higher yields than the current I Bond yield.

Are I bonds worth the hassle? ›

Whether I bonds make sense for you depends on your goals. If you only want to beat inflation, they'll ensure that you succeed. But if their $15,000 annual investment ceiling, withdrawal restrictions and interest rate uncertainty are turn offs, there are alternatives.

Which is better, EE or I bond? ›

Bottom Line. I bonds offer inflation-adjusted interest rates, which can make them a popular option for investors looking to preserve the purchasing power of their investments. EE bonds, on the other hand, may appeal to those seeking predictable, long-term returns, due to their fixed interest rates and tax advantages.

Should I buy bonds through broker or TreasuryDirect? ›

For many people, TreasuryDirect is a good option; however, retirement savers and investors who already have brokerage accounts are often better off buying bonds on the secondary market or with exchange-traded funds (ETFs). Treasury money market accounts also offer more convenience and liquidity than TreasuryDirect.

Can you lose money on bonds if held to maturity? ›

If you're holding the bond to maturity, the fluctuations won't matter—your interest payments and face value won't change.

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
3 days ago

How long does it take for a $100 EE savings bond to mature? ›

Series EE bonds mature in 20 years but earn interest for up to 30 years. The U.S. Treasury guarantees Series EE bonds will double in value in 20 years. You don't receive the interest on your Series EE bond until you cash it.

Should I cash in EE bonds now? ›

How long should I wait to cash in a savings bond? It's a good idea to hang on to your bond for as long as possible, ideally until it matures, so you can take full advantage of compound and accrued interest.

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