Savings bonds are savings certificates issued by the U.S. Treasury. The bonds are guaranteed by the U.S. government and earn interest that accumulates to a bond's value. The Treasury issues several types of savings bonds, and each is available in two forms.
Series EE Savings Bonds
Paper series EE savings bonds are the traditional savings bonds purchased for one-half of the denomination value. The smallest denomination series EE bond is a $50 bond purchased for $25. The largest denomination is a $10,000 series EE bond, which costs $5,000. These bonds accrue interest toward the denomination value. Currently issued series EE bonds are guaranteed to be worth the denomination value no later than 20 years after a bond was issued. They typically continue to accrue interest for 10 years after the maturity date, making them worth more than face value.
Series I Savings Bonds
Series I savings bonds earn interest that includes a factor for the rate of inflation. Paper series I bonds cost the same as the denomination of the bond. A $100 denomination series I bond costs $100. The smallest paper I bond is a $50 bond, and the largest bond has a denomination of $5,000. Series I bonds will accrue interest and grow in value from the denomination amount. Because I bonds earn interest based on the inflation rate, future values cannot be calculated.
Electronic Savings Bonds
Both EE and I series savings bonds are available in electronic form through an account with TreasuryDirect.com. The minimum purchase amount for either bond type is $25, and the maximum purchase amount is $5,000. Electronic EE and I bonds can be purchased in any value from $25 to $5,000. For example, an I bond could be purchase for $4,567.26. Electronic series EE bonds have a denomination equal to the initial purchase amount.
Savings Bond Purchase Limits
The purchase limit for each type of savings bond is $5,000 per year. However, each bond type, paper and electronic, can be bought in that amount. An investor who wanted to maximize her savings bond purchases in a year could buy one $10,000 series EE paper bond for $5,000, one electronic EE bond for $5,000, one paper series I bond with a denomination of $5,000 and an electronic I bond for $5,000. Total purchase limit would be $20,000.
- Treasury Direct: EE Savings Bonds in Depth
- Treasury Direct: I Savings Bonds in Depth
- TreasuryDirect. "Timeline of U.S. Savings Bonds." Accessed March 23, 2020.
- Department of the Treasury. "Introduction to Savings Bonds." Accessed March 23, 2020.
- New York State. "Certain Basics of Municipal Bonds." Accessed March 23, 2020.
- TreasuryDirect. "Series EE Savings Bonds." Accessed March 23, 2020.
- Federal Register. "United States Savings Bonds, Series EE, HH and I." Accessed March 23, 2020.
- TreasuryDirect. "Convert Your Paper Savings Bonds Using SmartExchange." Accessed March 23, 2020.
- Securities and Exchange Commission. "Zero Coupon Bonds." Accessed March 23, 2020.
- TreasuryDirect. "May 2005 and Later (EE Bond Rates and Terms)." Accessed March 23, 2020.
- TreasuryDirect. "Comparing Series EE and Series I Savings Bonds." Accessed March 23, 2020.
- Department of the Treasury. "Interest Accrual Dates for Series E, Series EE, and Series I United States Savings Bonds, and Savings Notes," Pages 1-2. Accessed March 23, 2020.
- TreasuryDirect. "Cashing (Redeeming) EE and E Savings Bonds." Accessed March 23, 2020.
- TreasuryDirect. "Buying Series EE Savings Bonds." Accessed March 23, 2020.
Tim Plaehn has been writing financial, investment and trading articles and blogs since 2007. His work has appeared online at Seeking Alpha, Marketwatch.com and various other websites. Plaehn has a bachelor's degree in mathematics from the U.S. Air Force Academy.