Should I buy Series I or Series EE Savings Bonds?

Friday, September 24th, 2004
Categorized as: Yesterday's News (old post archive)

I have $15,000 sitting in a bank as a CD not even making 1.5 percent interest. If I was to transfer it all into Saving Bonds, which series would give me the most interest after taxes?

Tom’s response

If you moved your $15,000 into either Series EE or Series I Savings Bonds, you’d earn a higher rate and you’d pay no tax at all until you redeemed them.

I think Series I bonds are a much better investment than Series EE. My book, Savings Bond Advisor, includes a seven-page look at the pros and cons of I bonds and the reasons that I prefer Series I.

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FDIC Insured Certificates of Deposit can pay 1 or 2% more than savings bonds when held for a similar length of time. See top CD Rates Below:


On January 21st, 2007 tonie said:

I am 30yrs old and I would like to purchase my first us savings bond? Which one would be the best for me?

On January 22nd, 2007 Tom Adams said:

Tonie – Historically Series I bonds have outperformed Series EE bonds. Series I is what I recommend.

On February 7th, 2007 Sam said:

Since inflation averages @ 2.5 percent, it would seem if the EE’s rate is 2.5% or more than the I bond’s fixed rate, the EE is worth considering.

On February 8th, 2007 Tom Adams said:

Sam – Your math is correct, but as readers of my book learn, whether you look back 10, 25, or 50 years (or as far back as the data goes, which is 93.5 years), the CPI has always yielded more than 2.5% on a long-term basis.

Tom Adams

On February 9th, 2007 RICHARD HETRICK said:


On February 9th, 2007 Tom Adams said:

Richard – Savings Bonds and CDs have a lot of differences besides the interest rate. You need to look at your own financial situation in terms of the differences to determine which is best for you.

For more information, see my post Series I bonds versus bank CDs.

On December 5th, 2007 Sarah Garcea said:

I want to start buying savings bonds for my new grandson, which is better, I or EE bonds? Also, is the initial cost at 50% of the face value? How many years until maturity?

On December 6th, 2007 Tom Adams said:

Sarah – The interest rates on EE bonds are so low that the Treasury is just taking advantage of people like you.

You should invest in I bonds. The initial cost is the same as their face value and they pay interest for 30 years years. They aren’t guaranteed to double in value like EE bonds, but they are highly likely to double years before EE bonds will.

Tom Adams

On May 10th, 2008 wendy said:

I would like to start buying 100.00 savings bonds each month for our three children. I was told that if I buy a fifty dollar bond that in 7 years it will double therefore will be equal to 100.00. My children are 12, 10, 6 and this is the first that we have had any extra money to start saving for college. I figured that if we could double what we are paying for, the children would have a little savings for college. Is it true that in 7 years the bonds double?

On May 12th, 2008 Tom Adams said:

Wendy – No, it is not true that EE Bonds double in 7 years – currently it takes 20 years. You’d probably be better off putting the money in a Qualified Tuition Program.

Tom Adams

On September 25th, 2008 Muriel Bonenfant said:

What is the difference in series EE bonds and I bonds ?

On September 25th, 2008 Tom Adams said:

Muriel – the information you’re looking for is here.

Tom Adams

On November 10th, 2008 cathie said:

The fixed rate of an I bond is .70% and the inflation rate 4.92% which totals 5.64% from 11/1/08 to 5/1/09, which is pretty darn good. But, in the future if the inflation rate is really low and you add the low fixed rate, won’t that make the bond a really bad investment?

On November 10th, 2008 Tom Adams said:

Cathie – You are correct, however, everything is relative.

Today’s I bonds are better investment than the ones issued from May through October, which had a fixed rate of 0%. And inflation would have to extraordinarily low for these I bonds to ever pay as little as today’s EE bonds.

Tom Adams

Comments Closed

June 1, 2010

After six years, over 400 posts, 3,680 real comments, and over 90,000 spam comments (thank you, Akismet, for making managing a blog with comments possible), I am closing public comments on I will contine to update the main articles on this site, but not the comments.

Virtually every question about Savings Bonds has been asked and answered on this site multiple times. Use the search feature (see the box in the gray area near the top of this page) or the detailed menu on the lower part of the home page to find the information you're looking for. If you have a copy of Savings Bond Advisor, you can ask me a question here.

Tom Adams

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