Business & Finance Personal Finance

Differences Between Series I & Series EE Bonds

By Business & Finance Last updated Monday, June/17/2024

Series EE Bonds

A Series EE Bond is one type of saving bonds. The bonds are available in both electronic and paper. The Bond does come with restrictions. For instance, a person can't purchase more than $5,000 of Series EE Bonds in one calendar year, according to the SEC. Another restriction is that there is a penalty of forfeiting the interest payments if the individual cashes in the Bond within five years of purchase.

A Series I Bond is the second type of saving bond. The saving bond is also available for purchase electronically and in paper with a cap of $5,000 worth within a calendar year. There is a penalty when cashing in the bond before the five year period. However, the penalty is different the Series EE Bond. If an individual redeems the Series I Bond before five years, then only the most recent interest is forfeited. For instance, if the person cashed in the Series I Bond in September then he won't receive the interest payment for that month.

According to the U.S. Treasury Department, the biggest difference between series EE and series I bonds is the interest rate on the savings bonds. The interest rates for Series EE Bonds depend on the date a person purchases the bonds. However, the interest rates for the Series I Bonds are based on the Consumer Price Index for all Urban Consumers (CPI-U). This means that the rate the result of merging the semi-annual inflation rates and fixed rates of return based on the CPI-U, according to the U.S. Treasury Department.

The Paper I Bonds are offered in seven denominations $50, $75, $100, $200, $500, $1,000, $5,000 for face value. For example, one paper I Bond purchase for $500 is cost $500. However, paper series EE are available at eight denominations of $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000. However, the series EE bonds' have purchase price of less than the amount purchased amount. For instance, for $250 a person can purchase a $500 a paper series EE Bond. This means that the paper EE Bonds slower than paper and electronic series I Bonds and electronic series EE Bonds. For example, the paper $500 EE Bond purchase for $250 matures to face value in 20 years according to the U.S. Department of the Treasury.