A United States savings bond is a loan to the federal government, sold in small denominations, that you hold until you choose to cash it in. There are two series on sale today, and they earn interest in fundamentally different ways. Series EE pays a fixed rate set at purchase, with a guarantee that the bond will double in value in 20 years. Series I pays a composite rate: a fixed rate that lasts the life of the bond plus an inflation rate that resets every six months. Both are bought electronically through TreasuryDirect, both are exempt from state and local tax, and both reward holding for years rather than months. This guide explains each series, the rates in force now, and the redemption and tax rules that decide what you actually keep.

The two series: EE and I, side by side

Series EE is the simpler of the two. You buy it at face value — $25 buys a $25 bond — and it earns a fixed rate of interest, set when the bond is issued, compounded semiannually. For bonds issued from November 1, 2026 through April 30, 2027, that fixed rate is 2.90%. On top of the fixed rate sits a guarantee: if you hold an EE bond for 20 years, the Treasury will make a one-time adjustment so the bond is worth double what you paid. Doubling in 20 years works out to an effective rate of about 3.53% a year, which means the guarantee, not the headline fixed rate, is what a 20-year holder actually earns. Hold past 20 years and the bond keeps earning its fixed rate until 30 years.

Series I is built for inflation protection. Its composite rate has two parts. The fixed rate is set at purchase and never changes for that bond — 1.40% for bonds issued November 2026 to April 2027, the highest fixed rate since November 2006. The inflation rate resets every six months, in May and November, based on the Consumer Price Index. For the November 2026 to April 2027 window, the semiannual inflation rate is 2.04% (4.08% annualised), giving a composite rate of 5.51% for the first six months of a new bond. After six months the inflation part changes and the composite rate changes with it; the 1.40% fixed part stays. Existing I bonds keep their own fixed rates and pick up the new inflation rate at their next reset.

Which series suits you depends on what you are protecting against. If you want a known nominal outcome and are confident you will hold 20 years, EE’s doubling guarantee is hard to beat for certainty. If you want protection against rising prices and may need the money sooner, I bonds pay more in high-inflation periods and their composite rate has no 20-year condition. Many savers hold both, for different jobs.

How I bond interest actually works

I bond interest is credited monthly and compounded semiannually, which produces two quirks worth knowing. First, interest accrues on the first day of each month, so a bond bought late in a month still earns a full month’s interest for that month — buying near the end of the month is a small, legitimate optimisation. Second, your bond’s six-month rate periods run from its issue month, not from May and November. A bond bought in November 2026 earns the 5.51% composite rate for November through April, then picks up the May 2027 inflation rate for May through October. A bond bought in February 2027 earns the same 5.51% for February through July. The announcement dates are fixed; your personal calendar is not.

The composite rate formula combines the fixed rate and the semiannual inflation rate: composite = fixed + (2 × semiannual inflation) + (fixed × semiannual inflation). With a 1.40% fixed rate and 2.04% semiannual inflation, that gives 0.014 + 0.0408 + 0.0002856 = 0.0551, or 5.51%. The arithmetic matters only because it shows the two parts are not simply added: the interaction term is tiny, but it is why published composite rates sometimes differ by a hundredth from a rough addition.

A worked example: $10,000 of I bonds bought in November 2026 earns 5.51% annualised for six months, which is $10,000 × 5.51% × 0.5 = $275.50 of interest over that half-year, credited monthly and compounding from the second half-year onward. After six months the rate becomes whatever the May 2027 announcement sets — it could be higher or lower, and the fixed 1.40% is the only part you can count on for the bond’s whole life.

Buying, limits, and paper bonds

New savings bonds are sold only electronically, through TreasuryDirect.gov, where you open an account, link a bank account, and buy in amounts from $25. The electronic purchase cap is $10,000 per series per person per calendar year — $10,000 of EE and $10,000 of I, separately. There is one additional route for I bonds: you may buy up to $5,000 of paper I bonds per year with your federal tax refund, using Form 8888. Paper EE bonds are no longer sold.

Older paper bonds still exist in drawers and safe-deposit boxes across the country, some of them decades old. Their value is not the face value printed on them: an EE bond bought for $25 in the 1990s may be worth several times that, or may have stopped earning interest at 30 years. The TreasuryDirect savings bond calculator, which takes the series, denomination, and issue date, gives the authoritative redemption value for any paper bond. If you inherit paper bonds, the same calculator and the Treasury’s guidance on deceased owners cover the transfer process; do not assume a bank will cash a bond it cannot verify.

Keep records. TreasuryDirect accounts hold electronic bonds indefinitely and show their current values, but paper bonds have no statement. Photograph or record the series, denomination, serial number, and issue date of any paper bond you hold, and store the record separately from the bond itself. If a paper bond is lost, the serial number is what makes replacement possible.

Redeeming: when, how, and what it costs

Redemption has three dates that matter. Before 12 months: you cannot redeem, except in narrow disaster-relief circumstances. Between 12 months and five years: you can redeem, but you forfeit the last three months of interest. After five years: no penalty. The penalty is worth quantifying before you act: redeeming a $10,000 I bond at 18 months, for example, costs roughly a quarter of a year’s interest at the rates then in force — at 5.51% that is about $138 on the most recent quarter, though the exact figure depends on the rate history of your bond.

Electronic bonds are redeemed in TreasuryDirect, with the proceeds deposited to your linked bank account, usually within one or two business days. Paper bonds are redeemed at most banks (for smaller amounts and with identification) or by mail to the Treasury Retail Securities Site with the appropriate form. Interest stops accruing on the redemption date, and the redemption is a taxable event for federal purposes in that year — see the next section. If a bond has reached 30 years, redeem it: it earns nothing further, and the deferred tax becomes due at final maturity whether you redeem or not.

A common mistake is redeeming the wrong bond first. If you need cash and hold both series, compare: redeeming an EE bond before its 20-year doubling date forfeits the guarantee, which can be worth far more than three months of interest; redeeming an I bond costs only the standard penalty. As a rule of thumb, redeem the bond whose remaining special benefit is smallest — usually the I bond, or the EE bond that has already passed 20 years.

Tax: deferral, exemption, and the education exclusion

Savings bond interest is exempt from state and local income tax in all states. Federally, you choose the timing: report interest annually as it accrues, or defer it until redemption or final maturity. Deferral is the default for most owners and the reason a large redemption can create a surprisingly large tax bill in one year — twenty years of interest arriving in a single return. If you hold a large position, consider redeeming across two calendar years, or electing annual reporting early, to spread the liability.

The Education Savings Bond Program can exclude the interest from federal tax entirely when the proceeds pay qualified higher-education expenses — tuition and fees at eligible institutions, not room and board — subject to income phase-outs, an ownership-age rule (the owner must have been at least 24 when the bond was issued), and a requirement that the bonds be in the owner’s name (or a spouse’s), not a child’s. The exclusion is claimed on Form 8815 in the redemption year, and the expenses must be paid in that same year. Income limits change annually; check the current year’s figures before relying on the exclusion.

One final tax point: savings bond interest is not subject to the net investment income tax, and it is reported on Form 1099-INT in the redemption year. Keep the 1099 with your return, and keep your own record of the bond’s issue date and purchase price — the Treasury reports the interest, but your records are what let you verify it.

Frequently asked questions

What is the current I bond rate?

For bonds issued November 1, 2026 through April 30, 2027, the composite rate is 5.51% a year for the first six months: a 1.40% fixed rate plus a 2.04% semiannual inflation rate. The fixed rate stays for the bond’s life; the inflation part resets every six months. The next reset is May 1, 2027.

What is the current EE bond rate?

For bonds issued November 1, 2026 through April 30, 2027, the EE fixed rate is 2.90%. EE bonds are also guaranteed to double in value if held 20 years, which works out to about 3.53% a year over that period.

How much in savings bonds can I buy per year?

Electronically, $10,000 per series per person per calendar year — $10,000 of EE and $10,000 of I, as separate caps. You may also buy up to $5,000 of paper I bonds per year with a federal tax refund.

Can I lose money on a savings bond?

No, in nominal terms. A savings bond bought for $25 is redeemable for at least $25 plus credited interest after the 12-month holding period, and its redemption value never falls. The risk is inflation: if prices rise faster than your bond’s rate, the purchasing power of the proceeds falls, which is the risk Series I is designed to reduce.

When do savings bonds stop earning interest?

At 30 years from the issue date, for both series. A bond held past final maturity earns nothing more, and deferred tax becomes due at maturity whether or not you redeem. Check issue dates and redeem matured bonds.

Are savings bond earnings taxed by my state?

No. Interest on United States savings bonds is exempt from state and local income tax. It is subject to federal income tax, deferred until redemption or maturity unless you elect to report it annually, with a possible exclusion for qualified education expenses.