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What Is a Savings Bond?
A savings bond is a loan to the government for up to 30 years. It's safe but earns less than other investments.
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A savings bond is a long-term investment with the rare ability to be given as a gift. And the recipient may be appreciative, given that some savings bonds have an annual rate of 5.27% through April 30, 2024. Though their returns generally pale when compared to mutual funds or stocks, U.S. savings bonds offer security and are protected against inflation, which can make them a particularly attractive option right now. Let’s break down how they work.
What is a savings bond?
A savings bond is a loan to the U.S. government that’s issued by the U.S. Treasury. When you buy one, you are lending money to the government. You can register yourself or someone else — even if they’re under 18 — as the owner or co-owner of a savings bond. A bond’s owner or beneficiary can cash it. A bond can also be cashed by a bond owner's attorney-in-fact, someone authorized through power of attorney to act on their behalf.
There are two types available for purchase, series EE and series I savings bonds, and you can buy them in an electronic format on the U.S. Treasury’s website, TreasuryDirect.gov. You can’t buy bonds made of paper at banks and brokers anymore, but you can still redeem them at a financial institution. Unlike other types of bonds, you can’t sell savings bonds to other investors or hold them in brokerage accounts.
The main difference between these two savings bonds is how their rates work.
A series EE bond has a fixed rate and earns interest plus a guaranteed return of double the value if kept for 20 years. So, regardless of the rate, the bond gets a one-time adjustment at the 20-year mark to ensure the value doubles. (Series EE bonds bought before May 2005 have either a variable or fixed rate, depending on the issue date.)
A series I bond has a rate that combines two things: a fixed rate and an inflation-adjusted rate calculated twice a year. The idea is that your money is protected from inflation, which is the overall rise in prices for goods and services (so you need more U.S. dollars to pay for the same items over time).
4.00%Annual Percentage Yield (APY) is accurate as of 10/09/2025. APY may change at any time before or after the account is opened. Available only online.
5.00%Annual Percentage Yield (APY) is accurate as of June 17th, 2025. Start earning 2.50% APY, then qualify to earn 5.00% APY on your balance up to $5,000.00 and 2.50% APY on balances over $5,000 next month by 1) Receiving direct deposit(s) totaling $1,000 or more; and 2) Ending the month with a positive balance in all your Varo Accounts. No fees, no minimums required. Rates subject to change at any time.
3.50%Annual Percentage Yield (APY) may change at any time and fees may reduce earnings. Please visit etrade.com/ratesheet for more information.
Min. balance for APY
$0
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
Up to 4.15%The Base Annual Percentage Yield (APY) is 3.50%, from program banks, is as of 11/07/25, is variable and is subject to change. If you are eligible for the overall boosted rate of 4.15% offered in connection with this promo, your boosted rate is also subject to change if the base rate decreases during the three-month promotional period. This limited-time promo offers eligible new Wealthfront clients a 0.65% APY increase over the standard base APY for 3 months on up to $150k in their Cash Accounts. Cash Account offered by Wealthfront Brokerage LLC, Member FINRA/SIPC, and is not a bank. Base APY (is representative, subject to change, requires no minimum) is paid from our Program Banks.
3.90%Cash Reserve offered by Betterment LLC and requires a Betterment Securities brokerage account. Betterment is not a bank. Learn More (https://www.betterment.com/cash-portfolio). Annual percentage yield (variable) is 3.25% as of 12/12/25, plus a 0.65% boost (“APY Boost”) for new clients with a qualifying deposit. $10 min deposit for base APY. Terms apply (betterment.com/boost); if the base APY changes, the Boosted APY will change. FDIC insurance provided by Program Banks (https://www.betterment.com/cash-portfolio), subject to certain conditions.
Min. balance for APY
$0
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
4.10%All Bread Savings APYs are accurate as of 12/04/2025. APYs are subject to change at any time without notice. Offers apply to personal accounts only. Fees may reduce earnings. To open a CD, a minimum of $1,500 is required and must be deposited in a single transaction. A penalty will be imposed for early withdrawals on CDs. At maturity, your CD will automatically renew and earn the base interest rate in effect at that time. Rates are compared against competitor rates published by NerdWallet.com and the institutions themselves as of 12/04/2025. NerdWallet.com obtains the data from the various banks that it tracks and its accuracy cannot be guaranteed.
4.10%Annual Percentage Yield (APY) is subject to change at any time without notice. Offer applies to personal non-IRA accounts only. Fees may reduce earnings. For CD accounts, a penalty may be imposed for early withdrawals. After maturity, if your CD rolls over, you will earn the offered rate of interest in effect at that time. Visit synchrony.com/banking for current rates, terms and account requirements. Member FDIC.
Term
9 months
Checking accounts are used for day-to-day cash deposits and withdrawals.
Checking accounts are used for day-to-day cash deposits and withdrawals.
2.00%Annual Percentage Yield (APY). APY may change at any time and fees may reduce earnings. Please visit etrade.com/ratesheet for more information. The $15 monthly account fee can be waived when you maintain an average monthly balance of at least $5,000 in the account on or after the end of the second calendar month from opening the account.
Monthly fee
$15
Money market accounts pay rates similar to savings accounts and have some checking features.
Money market accounts pay rates similar to savings accounts and have some checking features.
The current rates are 2.70% for a new EE bond and 5.27% for a new I bond. Interest is credited monthly and compounded twice a year. Rates on new EE bonds stay the same for at least 20 years and rates on new I bonds can change every six months, in May and November.
» Curious how savings bond rates compare to CDs’? See the best CD rates
Risk
Savings bonds are one of the safest types of investments available because they’re backed by the full faith and credit of the U.S. government. In other words, the government is on the hook for paying you back.
Amounts and limits
You can buy an EE or I bond at face value for any amount from $25 to $10,000, in penny increments. For example, you could buy a bond for $100.45. The annual maximum someone can receive in electronic savings bonds is $10,000 for EE bonds and $10,000 for I bonds. For paper I bonds, the annual maximum is $5,000.
Terms
Savings bonds earn interest for 30 years, but you can withdraw penalty-free after five years. If you’re familiar with certificates of deposit, you could think of a savings bond like a 30-year CD that becomes a no-penalty CD after the fifth year.
» Curious about CDs? See our explainer on CDs vs. bonds
Early withdrawal penalty
Cashing a savings bond before five years costs you the previous three months of interest. So if you redeem a bond at 20 months, you get the first 17 months of interest. The earliest you can withdraw is after one year. There’s no penalty for withdrawing after five years, but for EE bonds, you lose the opportunity to have your bond double in value if you don’t wait 20 years.
When should I consider a savings bond?
A savings bond might be considered for investors who want to avoid risk and have a long time frame for redemption. You can also give a bond as a gift to loved ones, including children, or bestow someone with inheritance money. But savings bonds aren’t part of investment or bank accounts and aren’t useful for short-term savings goals.
The main way to buy a savings bond is online through the U.S. Treasury’s website TreasuryDirect.gov; and in fact, that’s the only way to get EE bonds.
For people who want to buy a paper bond, there’s only one way: You have to buy I bonds when filing federal taxes. Buying a paper bond is less convenient, but it can be a more fun way to give as a gift.
For a paper bond, you must fill out a form when filing your federal taxes. You can only pay for it using a tax refund.
For an electronic bond, both you and your recipient must open a TreasuryDirect account. And you need to know your recipient’s full name and Social Security number or taxpayer ID number. Given that that’s sensitive information, a savings bond is likely best for a loved one.
If you’re giving a bond to someone under 18, their parent must open a TreasuryDirect account in their name and in their child’s name and manage the bond on the child’s behalf. Or, you can keep the bond until the child turns 18.
Why can’t I cash a paper bond bought from someone online?
You can find auction websites where paper bonds get bought and sold as souvenirs or collector’s items. But ownership of a savings bond can’t be transferred or changed except for in a few cases.
Why are the current series called EE and I?
The U.S. Treasury issued bond series mostly in alphabetical order: A, B, C, D, etc. Series E bonds lasted longer than most, and Series EE replaced E bonds. Series I bonds are inflation-adjusted so the “i” likely refers to inflation.
How do I calculate the value of a paper savings bond?
when filing your federal taxes. You can only pay for it using a tax refund.
For an electronic bond, both you and your recipient must open a TreasuryDirect account. And you need to know your recipient’s full name and Social Security number or taxpayer ID number. Given that that’s sensitive information, a savings bond is likely best for a loved one.
If you’re giving a bond to someone under 18, their parent must open a TreasuryDirect account in their name and in their child’s name and manage the bond on the child’s behalf. Or, you can keep the bond until the child turns 18.
Why can’t I cash a paper bond bought from someone online?
You can find auction websites where paper bonds get bought and sold as souvenirs or collector’s items. But ownership of a savings bond can’t be transferred or changed except for in a few cases.
Why are the current series called EE and I?
The U.S. Treasury issued bond series mostly in alphabetical order: A, B, C, D, etc. Series E bonds lasted longer than most, and Series EE replaced E bonds. Series I bonds are inflation-adjusted so the “i” likely refers to inflation.
How do I calculate the value of a paper savings bond?
If it’s a paper bond, you can cash it by visiting a brick-and-mortar bank or credit union, or by mailing a “request for payment” form to the Treasury. If you go to a bank or credit union, bring your ID and the savings bond. (See more details on how to cash a savings bond in person.) You’ll generally receive a tax form from the bank either immediately or by mail. If a bank doesn’t accept your bond, see the Treasury’s guide for next steps.
If it’s an electronic bond, log in to your account on TreasuryDirect and follow the instructions to confirm redemption and deposit to a linked checking or savings account. You can expect to receive the money generally within two weekdays.
Savings bonds vs. CDs
Savings bonds are low-risk loans to the U.S. government for up to 30 years, while certificates of deposit are bank accounts with terms generally from three months to five years. Savings bonds and CDs can both be part of an investing strategy that prioritizes stability over high returns.
What are other safe investment options to consider?
If you prefer investing with little to no risk, you may be interested in learning more about U.S. Treasury bonds or how CDs work. Bear in mind that low-risk investments also tend to have lower returns than other types of investments, such as stocks.
