Both I and EE bonds earn monthly interest that compounds semi-annually for up to 30 years. They can be sold 12 months after purchase and ultimately mature after 20 years. However, if sold prior to the five year mark, I and EE lose three months’ worth of interest. The main difference between I and EE bonds is their interest rate.
What is the difference between series I and Series EE bonds?
The newer Series I bonds have both a fixed rate and a variable rate to keep up with inflation. The Series EE savings bond has a fixed interest rate of return. The U.S. government commits that Series EE bonds will double its face value by the 20-year maturity. The Series I savings bond has no guarantee of value at maturity.
Should you buy a savings bond or a series Ee bond?
The U.S. Treasury offers two types of savings bonds, series I bonds and series EE bonds. Whether you prefer one over the other will depend on current interest rates and where you believe interest rates and inflation will trend in the future. Currently, as virtually all investors are aware, the Federal Reserve is waging war on inflation.
