Compare fixed-rate savings bonds (2024)

FAQs

What are the best fixed rate bonds at the moment? ›

The 4.28% composite rate for I bonds issued from May 2024 through October 2024 applies for the first six months after the issue date. The composite rate combines a 1.30% fixed rate of return with the 2.96% annualized rate of inflation as measured by the Consumer Price Index for all Urban Consumers (CPI-U).

Bottom line. I bonds, with their inflation-adjusted return, safeguard the investor's purchasing power during periods of high inflation. On the other hand, EE Bonds offer predictable returns with a fixed-interest rate and a guaranteed doubling of value if held for 20 years.

“Rates on fixed-rate accounts have been falling this year, with some providers dropping rates by nearly 25%. This means savers should explore all the current options to make the most of their savings pot.” The top interest rate per term from August 2023 to February 2024 - data from Deqfato and Money.co.uk.

EE bonds you buy now have a fixed interest rate that you know when you buy the bond. That rate remains the same for at least the first 20 years. It may change after that for the last 10 of its 30 years. We guarantee that the value of your new EE bond at 20 years will be double what you paid for it.

For most individual investors, CDs can play a useful role as a very low-risk part of a fixed-income portfolio or a place to park cash while earning a bit of interest. Bonds are more complex but can offer higher yields for those willing to take on a bit more risk.

Series EE savings bonds are a low-risk way to save money. They earn interest regularly for 30 years (or until you cash them if you do that before 30 years). For EE bonds you buy now, we guarantee that the bond will double in value in 20 years, even if we have to add money at 20 years to make that happen.

Current Rate: 2.70%

Maximum purchase each calendar year: $10,000. Can cash in after 1 year. (But if you cash before 5 years, you lose 3 months of interest.) (Note: Older EE bonds may be different from ones we sell today.)

Are I bonds tax free? ›

Is interest income from I bonds taxed as capital gains? No, the interest income earned from I bonds is not considered a capital gain and is therefore taxed differently. Instead, it is taxed as regular income at the federal level and exempt from state and local taxes.

U.S. Savings Bonds mature after 20 or 30 years, depending on the type of bond: Series EE bonds mature after 20 years. They are sold at half their face value and are worth their full value at maturity.

You can skip paying taxes on interest earned with Series EE and Series I savings bonds if you're using the money to pay for qualified higher education costs. That includes expenses you pay for yourself, your spouse or a qualified dependent. Only certain qualified higher education costs are covered, including: Tuition.

Further, I-bonds must be held for at least a year, so you won't be able to cash them out before a year is up if the rate plunges due to falling inflation. In fact, you'll lose the last three months of interest if you redeem them before five years are up.

You can get your cash for an EE or I savings bond any time after you have owned it for 1 year. However, the longer you hold the bond, the more it earns for you (for up to 30 years for an EE or I bond). Also, if you cash in the bond in less than 5 years, you lose the last 3 months of interest.

As of May 2024, the Principal High Yield Fund Class A (CPHYX) is the highest-yielding bond fund on our list at 7.1%. It also has the highest expense ratio at 0.94%. For every $1,000 invested in CPHYX, you'll pay a relatively hefty $9.40 to help cover the fund's expenses.

The current composite I bond rate is 4.28%. This includes a 1.30% fixed rate and a 1.48% inflation rate. The current rate applies for six months to bonds purchased between May 1, 2024, and Oct. 31, 2024.