What Are Series EE Savings Bonds? How They Work and Whether They're Worth It

Series EE savings bonds are a low-risk U.S. Treasury investment with an unusual guarantee: no matter what interest rate they earn along the way, the government guarantees they'll be worth at least double your purchase price after 20 years.

How EE Bonds Work

You buy an EE bond electronically at TreasuryDirect.gov for its face value (a $100 purchase buys a $100 bond). It earns a fixed interest rate set at purchase, compounded semiannually, for up to 30 years. If the fixed rate wouldn't otherwise double your money by year 20, the Treasury adds a one-time adjustment at the 20-year mark to make sure it does.

EE Bonds vs. I Bonds

• EE bonds: fixed rate for the life of the bond, guaranteed to double in 20 years, better if you can hold to at least that mark
• I bonds: rate adjusts with inflation every 6 months, better protection if inflation runs hot, no doubling guarantee
• Both: $10,000/year electronic purchase limit per person, must hold at least 1 year, lose 3 months of interest if redeemed before 5 years

Tax Treatment

Interest is exempt from state and local tax, and federal tax can be deferred until redemption or maturity. If used for qualified higher education expenses and you meet income limits, the interest may be entirely tax-free.

Is an EE Bond Worth It?

The guaranteed doubling only kicks in at exactly 20 years — cash out earlier and you just get the (often low) stated rate, which historically underperforms a simple index fund over the same period. EE bonds make the most sense for a specific, long-dated, low-risk goal — like a portion of a child's future college fund or a guaranteed baseline for retirement 20 years out — not as a primary growth investment.