The good points of Series EE savings bonds are well known: backed by the U.S. government, they are risk-free, inexpensive and easy to buy.

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EE Bonds Compared to other products

EE Bonds, I Bonds, and TIPS are all products offered by the U.S. Treasury as ways to purchase public debt. There are many differences between the three products, and each one has different pros and cons that you should consider before investing. While Series EE and Series I are both savings bonds products, each has different interest rates, tracking mechanisms, and attributes. Series I Bonds will change their interest rate every 6 months to track inflation while a newly purchased EE Bond will not change rates at all. Savings bonds cannot be sold at market whereas TIPS can. Below is a quick overview of the three products and their differences.

EE Bonds vs. I bonds vs. TIPS - Quick Comparison

EE bonds I bonds TIPS
Maximum Purchase Limit per year $10,000 electronic $10,000 electronic and up to $5,000 paper as a result of a tax refund None
Minimum purchase: $25 for a $50 EE Bond for paper bond certificates.
$25 for a $25 EE bond when purchased electronically.
$50 for a $50 I Bond for paper bond certificates .
$25 for a $25 I bond when purchased electronically.
$100
Denominations: Paper bonds*: $50, $75, $100, $200, $500, $1,000, $5,000, and $10,000.
Electronic bonds: purchase to the penny for $25 or more.

* Paper EE Bonds no longer issued
Paper bonds*: $50, $75, $100, $200, $500, $1,000, $5,000.
Electronic bonds: purchase to the penny for $25 or more.

* Paper I Bonds no longer sold directly. Only available as part of a tax refund.
Multiples of $100 electronically only.
Earnings Series EE Bonds issue dated May 2005 and after will earn a fixed rate of interest. A fixed rate of return and a  variable semiannual inflation rate (based on CPI-U  for March and September) are combined. Price and interest determined at auction.
Minimum term of ownership: 1 year 1 year No minimum. TIPS can be held until maturity or sold before maturity.
Interest-earning period: 30 years 30 years TIPS are issued in terms of 5, 10, and 20 years.
Early redemption penalties: 3-month interest penalty if redeemed during the first 5 years . 3-month interest penalty if redeemed during the first 5 years. None
Type of Investment: Non-marketable - cannot be bought or sold in secondary securities market. Non-marketable - cannot be bought or sold in secondary securities market. Marketable--can be bought and sold in the secondary securities market
Inflation Indexing: N / A Semiannual inflation rate (based on CPI-U changes) announced in May and November. Inflation adjustments measured by CPI-U published monthly




Page last modified 1/31/2012