LemonTrades
TL;DR
- A savings bond is a loan to the US government. You buy it, it earns interest for up to 30 years, and you get it all back when you cash it in.
- There are two kinds on sale. From November 1, 2026, EE bonds pay 2.90% and I bonds pay 5.51% for the first six months.
- You can buy up to $10,000 of each a year at TreasuryDirect, and you must hold for at least one year.
- LemonTrades warns you before every inflation report and Fed decision, the news that moves these rates.
Savings bonds are issued by the US Treasury and can’t lose value. They won’t make you rich, but I bonds now carry their best fixed rate in years. Here’s how they work.
| Series EE | Series I | |
|---|---|---|
| Rate now | 2.90% | 5.51% |
| How the rate works | Fixed when you buy, for 20 years | A fixed part (1.40%) plus an inflation part that resets every 6 months |
| Guarantee | At least doubles in 20 years | Keeps up with inflation; can’t fall below what you paid |
| Earns interest for | 30 years | 30 years |
| Most you can buy a year | $10,000 | $10,000 |
| Least you can buy | $25 | $25 |
| Where | TreasuryDirect, electronic only | TreasuryDirect, electronic only |
Rates are for bonds bought from November 1, 2026 to April 30, 2027. The two limits are separate, so one person can buy $20,000 a year in total.
How a savings bond earns money
You don’t get regular payments. Interest is added to the bond every month and compounds every six months, and you collect it all when you cash in. Nothing is paid until then, and that’s also when federal tax on the interest usually comes due.
EE or I: which is better now?
- I bonds protect you from inflation. Their 1.40% fixed part stays for the bond’s whole life, on top of inflation, so the 5.51% will change as inflation does. If inflation falls, so does your rate.
- EE bonds look weak at 2.90%, but the Treasury promises to double your money at 20 years. That works out to about 3.5% a year, as long as you hold for the full 20 years.
For comparison, inflation was 3.7% in September, and the 10-year Treasury pays more than an EE bond, but its price can fall if you sell early. A savings bond’s value never drops.
The rules
- One-year lock: you can’t cash in during the first 12 months.
- Early penalty: cash in before 5 years and you lose the last 3 months of interest.
- Taxes: interest is subject to federal income tax, but not state or local tax. It can be tax-free if you use it for college and meet the income rules.
- Where to buy: a TreasuryDirect account, with a Social Security number and a US bank account. New bonds are no longer sold on paper.
Should you buy one?
They suit money you want safe for years: a house fund, a child’s savings or the low-risk part of a retirement plan. They don’t suit money you may need within a year, or long-term growth, where stocks have done better. Already own one? See how much your bond is worth.
Sources
- TreasuryDirect: new savings bond rates, November 1, 2026
- TreasuryDirect: EE bonds
- TreasuryDirect: I bonds
- TreasuryDirect: cashing a bond
Education, not financial advice. See our disclaimer.
