Q:

What is the difference between EE and I Bonds?

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Quick Answer

Although both savings bond programs offer low-risk investments, the EE bond program offers investors a guaranteed double return during the first term, while the I-series savings bond comes with a fixed-coupon rate that adjusts for inflation, explains Investopedia. Coupon rates for the EE savings bond are set twice a year, in May and November.

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Full Answer

Both series EE and I savings bonds are nonmarketable, which means they cannot trade on the secondary market, states Investopedia. However, the series EE savings bond program is well-known among investors and is much older than the series I savings bond program. Investors can no longer purchase series EE paper savings bonds and must purchase the bonds electronically.

The maximum limit for electronic purchases of series EE and series I savings bonds stands at $10,000, as of 2015, according to Investopedia. However, the maximum limit investors can purchase when buying paper series I savings bonds using their tax refund is $5,000. Although series I paper bonds no longer exist for direct sale, investors may purchase the paper bonds as part of their tax refunds. Both series EE bonds and series I bonds are subject to federal taxes; however, investors who use series I bonds for higher education are exempt from federal taxes if they sell the bond and immediately use the funds for education.

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