In 1935, the United States Treasury Department initiated a program to encourage citizens to save money and participate in the government by purchasing savings bonds. The Treasury Department, on the other hand, has evolved along with the times, and paper versions of savings bonds are now quite rare. The Series EE and the Series I are the two varieties of savings bonds now available. Series EE bonds are investments that are guaranteed to double in value after 20 years, and they come with a set interest rate. They have a shelf life of thirty years. To maintain purchasing power in the face of rising prices, more recent issues of Series I bonds come with both a fixed rate and a variable rate. So let us have a look at U.S. savings bonds series EE vs. series i: knowing the difference between them.

Series EE Savings Bonds of the United States

The better-known Series EE savings bond is directly related to the Series E savings bond. The first Series E bonds were called "War Bonds," which helped pay for the U.S. to fight in World War II. You can buy Series EE bonds with as little as $24.9 face value. There are also face values higher than the base $24.9 by one penny. So, you could buy a bond for $25.32 if you wanted to. In a year, a buyer can only buy things worth up to $9,999. Bonds can't be sold on the secondary market because they were only given to one person.

Redemption and Double Price Guarantee

The government of the United States promises that the value of EE bonds will at least double over the 30-year term of the bond. Most of the time, after 20 years, the bond owner can either pay back the principal or let it keep earning interest for another ten years after the date when the interest doubles. You can't cash in the bond until a year has passed. After that date, they can take their money out whenever they want, but they won't get any more interest. If you cash it out before the five-year mark, you must pay interest for three months.

EE Series Rate Of interest

The interest rate is set for 20 years when it is given out. The government could change the pace after 20 years. Rates on series EE bonds are fixed two times a year, in November and May, and stay exact for all other bonds distributed in the next six months. When someone buys a Series EE electronic bond, they pay the total face value of the bond right away. The U.S. Treasury has promised to make the difference if the interest doesn't double in 20 years. Interest on EE bonds is not taxed at the state or local level, but it is taxed at the federal level.

Series I Savings Bonds of the United States

The Series I savings bonds aren't that old. In 1998, they were first sold. Series I bonds aren't guaranteed to double in value in 20 years like Series EE bonds are. The interest rate they offer also takes inflation into account. Every six months, in May and November, the rate changes. Based on the Consumer Price Index for All Urban Consumers, these changes were made (CPI-U). This CPI number takes into account the things that almost 90% of Americans buy and is thought to be a better way to measure how much people spend. The interest rate on Series I bonds purchased in the six months ending in October 2021 is 3.54 percent.

How to Purchase Series I Bonds

Series I bonds can only be bought from the U.S. Treasury. You can also buy them with money from your tax return or a refund. When someone buys Series I bonds with cash from their tax return, they rarely get a paper certificate. Also, Series EE bonds have several things in common. Series I bonds can't be sold, but if it's been less than five years since they were issued, they can be turned in early for three months' interest.

What Makes Series I Bonds Different

Series I bonds can pay for college without federal, state, or local taxes. This could be a good thing. For the money to count, the bond must be cashed in and used in the same calendar year. The main difference between the two savings bonds is the interest rate. Series I bonds aren't as sure that their value will double in 20 years, but they consider inflation. What could go wrong, anyway? The owner of a Series I bond could have to deal with years of low or even negative inflation and miss out on the bond's value doubling over time.