Why I Like US I Savings Bonds

Daniel Penzing
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Composite Earnings Rates

The composite rate for current series EE savings bonds is 0.50% This rate applies to all securities issued from May 2004 to April 2005. These earning rates were announced by the Treasury in November 2004.

The composite rate for series E, series EE, and series I savings bonds purchased from May 1998 through April 2004 is 3.60% (assuming average life), with a rate of 3.54% (assuming a 10 year average life) if purchased April 2003 to present.

As always, you'll receive the greatest return by owning the savings bond for the full 25, 20, or 15 year period.

Recently, a few of my clients have asked us about how to receive "the" Series I savings bond interest rate. This confusion is understandable, given all the recent changes to savings bond rates.

The Series I Savings bond cannot be financed. So, if you plan to purchase a Series I with a loan, the terms of the loan need to be clearly understood.

If the Series I savings bond is issued with a paper check (or older paper bond certificate), the interest payout begins 6 months from the savings bond issue date.


In the nearly forty years they’ve been available, U.S. Savings Bonds have earned a special place in American history. They help families finance a college education, start a small business, or plan for retirement. By making the process easier, they make saving easier too.

No one can outgrow U.S. Savings Bonds. Anyone, anywhere can buy them and, when purchased, these investments don’t care if you’re young or old, rich or poor.

Savings Bonds have a steady interest rate that increases over time, giving you a guaranteed rate of return. Plus, they can be redeemed for cash at any time which makes them easy to use.

Pros and Cons

In today’s investment landscape, it is pretty hard to get invest without taking risk. While this is absolutely necessary sometimes, there are times when you really don’t want to take much risk in your investments. Now, I am not saying that using US Savings Bonds is a great way to invest your money to make a huge profit, but it is a great way to save money without putting a lot of money at risk.

With that being said, there are many people that are misinformed or just don’t understand the benefits of holding US Savings Bonds. Some of these people, as a result, make bad financial decisions that cost them more money than holding one or both of these US Government Bond offerings.

So before you make any more financial mistakes, take a few minutes to read this brief, yet comprehensive, overview of US Savings Bonds.

The two main types of US Bonds are:

I Bond

I Bond Tips

For first-time savers who want to put a little extra in their savings account, US government savings bonds may be worth a look. These bonds are issued by the Treasury Department, so you know that the money is backed by the full faith and credit of the US government.

What you may not know, however, is that US I savings bonds have extremely competitive interest rates, as well as a number of perks that no other type of bond can match. In this post, we’ll take a closer look at the US I savings bond and give you some tips on how you can get the most out of it.

What are US I Bonds?

US I savings bonds have been available in one form or another since 1942. They are issued in fixed denominations (which can’t be split up), and their interest rate and annual percentage yield (APY) depend on the length of time for which you save.

I-Bonds Seriously?

An IRA is a retirement account in which you set aside money in order to grow your savings. These investments must be held for an extended period of time in order to avoid taxes. Most commonly, IRA’s use stocks, bonds, mutual funds, gold, silver, and other precious metals as investment options. Generally speaking, this is a safe investment option with up to a 7% return. There are several options for setting up a Section-408 account. You can set one up through a traditional bank, a credit union, or with the help of a broker. In this article, we will focus on the government’s I-Bond option.

Why I-Bonds?

In the modern world, financial services are on the rise. Nearly everyone, it seems, is looking for the golden ticket investment strategy that will allow them to retire early. Few things can provide a safe, consistent stream of income like certificates of deposits or Individual Retirement Accounts. This is one of the primary benefits that I-Bonds offer. They guarantee a set rate of return over a period of time. In effect, I-bonds are a low-risk investment strategy that can help everyday Americans save money for the future, just as long as the money is available when it’s needed.

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