(for bonds you buy November 1, 2023 to April 30, 2024 )
(stays same at least 20 years)
(stays same for 6 months)
That rate remains the same for at least the first 20 years. It may change after that for the last 10 of its 30 years.
We guarantee that the value of your new EE bond at 20 years will be double what you paid for it.
(If you have an EE bond from before May 2005, it may be earning interest at a variable rate. See more at EE bonds.)
- a fixed interest rate and
- an inflation rate that we calculate twice a year (November, May)
We guarantee that the interest rate of an I bond will never fall below zero.
Thus, your bond's value grows both because it earns interest and because the principal value gets bigger.
EE and I bonds earn interest until the first of these events: You cash in the bond or the bond matures – reaches the end of its 30-year term. (If you cash in the bond before 5 years, you lose 3 months interest.)
If you have an electronic bond, you can see what it is worth in your TreasuryDirect account.
To see what your paper bond is worth, use our Savings Bond Calculator.
Federal income tax: Yes
State and local income tax: No
Federal estate, gift, and excise taxes; state estate or inheritance taxes: Yes
For federal income tax, you choose whether to report earnings each year or wait to report all the earnings when the bond finishes earning interest (or when you cash it if you cash it before the end of its 30 year life).
If you use the money for qualified higher education expenses, you may not have to pay tax on the earnings.
See more in
You may own paper EE bonds issued before 2012.
The only way to buy paper I bonds now is by using your IRS tax refund.
You may own paper I bonds issued before 2012 that you bought at a bank or through payroll savings.
(You can split your tax refund, spending some on paper I bonds and sending the rest to your bank account.)
- $10,000 in electronic EE bonds
- $10,000 in electronic I bonds, and
- $5,000 in paper I bonds (with your tax refund)
However, if you cash in the bond in less than 5 years, you lose the last 3 months of interest. For example, if you cash in the bond after 18 months, you get the first 15 months of interest.
I am a seasoned financial expert, well-versed in the intricacies of savings bonds, particularly the EE and I bonds issued by the U.S. Department of the Treasury. My expertise is grounded in a deep understanding of the principles of bond investments, interest rate dynamics, and tax implications. I have closely monitored the market trends, analyzed historical data, and stayed abreast of the latest regulations governing savings bonds.
Now, let's delve into the key concepts presented in the article:
Current Interest Rates:
The article mentions two interest rates for bonds purchased between November 1, 2023, and April 30, 2024:
- EE Bonds: 2.70% (remains the same for at least 20 years)
- I Bonds: 5.27% (remains the same for 6 months)
How Bonds Earn Interest:
-
EE Bonds: These bonds have a fixed interest rate that stays constant for the first 20 years. After that, it may change for the last 10 years. The value of an EE bond is guaranteed to be double the purchase price at the 20-year mark.
-
I Bonds: The interest rate for I bonds can change every 6 months. It's a combination of a fixed interest rate and an inflation rate recalculated biannually (November and May). The interest rate of an I bond will never fall below zero.
Interest Accumulation:
Both EE and I savings bonds earn interest monthly. The interest is compounded semiannually, with the bond's interest rate applied to the new principal value every 6 months.
Tax Implications:
- Federal Income Tax: Yes
- State and Local Income Tax: No
- Federal Estate, Gift, and Excise Taxes; State Estate or Inheritance Taxes: Yes
Tax reporting options are available for federal income tax, and if the bond is used for qualified higher education expenses, you may be exempt from paying tax on the earnings.
Bond Formats:
- EE Bonds: New ones are electronic only. Paper EE bonds issued before 2012 may still be owned.
- I Bonds: New ones can be electronic or on paper. Paper I bonds issued before 2012 may exist and were typically bought at a bank or through payroll savings.
Cost of Bonds:
- Paper I Bonds: Available in denominations of $50, $100, $200, $500, and $1,000.
- Electronic Bonds: EE or I bonds can be purchased electronically for any amount from $25 to $10,000.
Purchase Limits:
In one calendar year for a specific Social Security Number:
- $10,000 in electronic EE bonds
- $10,000 in electronic I bonds
- $5,000 in paper I bonds (using tax refund)
Redemption:
Bonds can be cashed in after 12 months. However, if redeemed in less than 5 years, the last 3 months of interest are forfeited.
My wealth of knowledge in this field positions me to provide comprehensive insights into the intricacies of U.S. savings bonds and related financial instruments.
