Series I versus Series EE

Tuesday, July 27th, 2004
Categorized as: Series EE US Savings BondsSeries I US Savings Bonds

Where can I find comparisons on how Savings Bonds are doing against one another, for example, should I get Series EE or I bonds? And how long does it take for these bonds to mature or reach their face value. For example, a $100 dollar bond purchased for $50, how long until it is worth $100? A cashier at my bank told me they were now taking up to 21 years to reach face value. Is this correct?

Tom’s response

My book, Savings Bond Advisor, has a complete analysis of the Series EE vs Series I question, which is too detailed for an email. The analysis suggests Series I bonds are the better investment.

Series EE bonds are purchased at one-half face value ($50 for a $100 bond) and the Treasury guarantees they will double in value in 20 years. This represents a guaranteed interest rate of 3.5% if you hold the bond for the full 20 years.

Series I bonds are purchased at face value and don’t have a double-value guarantee. Each issue of I bond has a fixed base-rate and also earns the current rate of inflation, which is adjusted every six months. If these rates average more than 3.5%, an I bond will double in value in less than 20 years.

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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:

18 Comments

On February 19th, 2009 Chris Rowen said:

If the EE doubles in 20 years guaranteed, is it still possible to double faster, or be worth more than double in 20 years?

On February 19th, 2009 Chris Rowen said:

Also, am I understanding this correctly. If we go into a deflationary time, then the I bond is basically only making what the current fixed rate is, right?

On February 20th, 2009 Tom Adams said:

Chris – older EE bonds could theoretically double faster, but the ones issued today cannot.

If deflation is severe enough, it can also wipe out the fixed rate of I bonds, although the total rate can’t go below zero.

Tom Adams

On March 19th, 2009 Debbie Oliphant said:

I have some Series I Savings Bonds issued 10/01 and some Series EE Savings Bonds issued 12/02. How can I find out when they reach their maturity dates and when they’ll be worth their face value?

On March 20th, 2009 Tom Adams said:

Debbie – the I bonds were worth their face value on the day they were issued. That vintage of EE bonds reaches face value after 17 years. Both stop earning interest 30 years after issue.

On March 29th, 2009 corey said:

MY FATHER GAVE ME SOME SAVINGS BONDS WHEN I TURNED 25 YEARS OLD. FIVE YEARS LATER HE SAID HE NEEDED THEM BACK BECAUSE HE HAD RAN UP HIS CREDIT CARDS, AND HE WANTED TO PAY THEM OFF. BOTH OF OUR NAMES ON THE BONDS. I TOLD HIM THAT I AM NOT GOING TO RETURN THEM TO HIM, HE HAS TOLD ME HE IS GOING TO FILE A MISSING / LOST CLAIM ON THE BONDS AND THAT THEY WOUULD BE RE-ISSUED AND MAILED TO HIM. SHOULD I WORRY ABOUT THIS ? I HAVE THE BONDS IN A SAFETY DEPOSIT BOX, IF HE FILES A LOST CLAIM AND THEY ISSUE HIM NEW BONDS, WILL THE ONES I HAVE BE NO GOOD? PLEASE LET ME KNOW.

THANKS
COREY

On March 30th, 2009 Tom Adams said:

Corey – yes, in theory he can do that and if he did the bonds you have would be worthless.

But if the bonds have both your names on them he has to get your signature on the form for having the bonds replaced, so you have some negotiating room here.

Tom Adams

On April 14th, 2009 Lisa / Rauol said:

My husband and I are 40 year’s young and we have 3 small children age 5,8,10. We were thinking about purchasing 4 saving bonds one for us and one for each child. So, that we will have extra retirement savings and money for kids for college.

Do you think this is a wise to do?

On April 15th, 2009 Tom Adams said:

Lisa – It’s impossible to answer your question without knowing more about your situation.

For most people without an employer-funded retirement account, however, Roth IRAs are a much better way to save for retirement than Savings Bonds, but it’s a bit more complicated to set this up. If you want the safety of Savings Bonds, set one up with a reputable company like Vanguard or TIAA-CREF and have your Roth money invested in a Treasury Inflation Protected Bond fund.

For your children, a Qualified Tuition Plan is better than Savings Bonds for most people, but it depends on your tax situation. You can find out more about these by doing a Google search on Qualified Tuition Plan and include the name of your state in the search, as different states have different plans.

Tom Adams

On May 6th, 2009 Shelly said:

My Aunt want to give $2500.00 to her grandchildren and I sugjested savings bonds for the ones still in high school and want to know which ones would be the best for 3 years, so they will have money for college.

On May 7th, 2009 M Bags said:

Looks like you overall recommend the I bonds over the EE? I am looking to purchase some as gifts and am not as familiar with the I as I am with the EE. They are for my children who are both under 4 – so there will be ample time for the bonds to mature.

On May 7th, 2009 Tom Adams said:

Shelly and M – The interest rates paid by Savings Bonds are on the low end of stingy right now. I don’t really have any alternatives for you, but the I bond will do better than the EE bond, even just three years out, barring a complete financial disaster that leads to months of deflation.

Tom Adams

On June 1st, 2009 B. Lujan said:

I have twin boys.. When they turned 5 I invested 10K into stocks, in 3 years it gained 2K, but lately with the economy in 6 months time, it has lost 6K. I also have $ in CD’s and college savings funds, however I am also looking into other things to build upon moneys. My boys are now 9. Can you suggest a place for me to invest money in that will acrue at a steady rate? I would like to give them the money upon graduation.

On June 2nd, 2009 Tom Adams said:

B. Lujan – if you’re interested in a steady rate, Series I bonds do that, as shown in the chart here.

Tom Adams

On August 17th, 2009 Joan Ermert said:

Is it possible to exchange Series EE Bonds for Series I without a penalty? And would that be beneficial, especially for more current EE bonds that have a lower interest rate?

On August 18th, 2009 Tom Adams said:

Joan – no, exchanging Series EE and I bonds is not possible, although it would definitely be beneficial.

Tom Adams

On May 20th, 2010 MILES JAMES said:

I have a savings bond from 1992, with both me and my moms name on it to be cashed in athe the time of my fathers death but I think my mom has cashed them in without me, can she do that.
And how can I find out how many bonds in total had my name on them?

On May 20th, 2010 Tom Adams said:

Miles – If the bonds have been cashed, you can’t find out anything unless you have the serial numbers of the bonds. If they have not been cashed, you can follow the process outlined here.

Either co-owner of a Savings Bond can cash it without the knowledge or permission of the other.

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 Savings-Bond-Advisor.com. 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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