Savings Bonds - What's the Difference?

Question

What are the differences between EE and I savings bonds?? Can someone please explain this to me? We've had family member purchase both for our daughter, and we have purchased some as well, is one type better than the other?

Answer 1

There is nothing wrong with either of them, but a someone who buys an I Bond is giving you face value and the person who buys you a EE Bond only paid half.  Essentially a $100 I Bond is equal to a $200 EE Bond.  Check out the link I attached for more information direct from the source!

"Paper I Bonds are... purchased for their face value (for example, a $100 I bond costs $100).

"Paper EE Bonds are... purchased for 50% of their face value (for example, a $100 EE bond costs $50).

Answer 2

I bonds have some inflation protection built into them (like TIPS bonds).  A reasonable argument can be made that they are worth holding for 10+ years.

EE Bonds are only as valuable as the interest rate they pay and the tax free interest provision for education.  Hold them only as long as the tax free interest rate is greater than what you can receive elsewhere.