With U.S. Savings Bonds, consumers and businesses can receive a guaranteed interest rate on their savings. These bonds help fund federal spending with terms of up to 30 years. The U.S. government currently issues two types of savings bonds–Series EE and Series I–that can be bought online through its Treasury Direct website. Although there are only two types of U.S. Savings Bonds, their uses can be quite flexible and each one can be an ideal investment in certain situations. To determine the best U.S. Savings Bonds for a variety of situations, we analyzed the benefits of each type of savings bond, their interest rates, maturities, and other relevant factors. The best savings bonds are easy to purchase, offer attractive interest rates, and include tax benefits on the interest they earn. Why We Chose It Series I Savings Bonds are the best overall because their earnings adjust with inflation, come in both paper and electronic forms, and may avoid Federal taxation when used to pay for education. Pros & Cons Pros Interest rate adjusts every six months based on inflation Can purchase electronic or paper bonds Earnings exempt from state income tax May avoid Federal taxes when used for education Can purchase for as low as $25 Cons Must own for one year before selling Lose three months' of interest if sold before five years Interest rates are not guaranteed Maximum purchase of $10,000 per year of electronic bonds and $5,000 of paper bonds May only buy paper bonds with a Federal tax refund Overview Series I Savings Bonds are our choice for the best U.S. savings bonds because they offer a higher return that adjusts with inflation, can be delivered electronically or in paper form, and may avoid Federal taxation when used to pay for higher education. Series I Savings Bonds are also the best choice for education savings because of the tax break when paying for college and inflation adjustment. Bondholders will continue to earn interest for up to 30 years or until the bond is cashed in, whichever comes first. The current rate is 6.89% for bonds issued between November 2022 and April 2023. Interest rates are a combination of a fixed rate plus a semi-annual inflation rate that adjusts every six months. These bonds can be purchased for as little as $25, with a maximum of up to $10,000 per calendar year per Social Security Number. Electronic bonds have a minimum purchase of $25 and a maximum of $10,000 with denominations of any amount in between in penny increments. Paper bonds start at $50 each, come in denominations of $50, $100, $200, $500, and $1,000, and have a maximum purchase amount of $5,000 per year. Electronic savings bonds can be purchased at any time through Treasury Direct, while paper bonds are only available with your IRS tax refund. Series I Savings Bonds must be held for at least one year before they can be redeemed. These bonds are known as zero-coupon bonds, which means that they do not receive regular interest payments. The interest accrues and is paid out when the bond is cashed. If you redeem them during the first five years, you'll forfeit the interest earned from the previous three months. After five years, there is no penalty. Interest earned is taxable at the Federal level, however, it may be excluded when used to pay for education. Savings bonds are exempt from state and local income taxes but you may owe estate or inheritance taxes, depending on your personal circ*mstances. Why We Chose It Series EE Savings Bonds are the best gift, retirement planning, and for diversifying a portfolio because they provide a guaranteed rate of return and, even if interest rates are lower, the savings bond will be worth double its face value after 20 years. Pros & Cons Pros Fixed-rate of interest Worth double face value after 20 years Earnings exempt from state income tax May avoid Federal taxes when used for education Can purchase for as low as $25 Cons Must own for one year before cashing in Lose three months of interest if cashed in before five years Interest rates are lower than alternatives Maximum purchase of $10,000 per year Cannot buy paper savings bonds Overview Series EE Savings Bonds are the best savings bonds for gifts, retirement planning, and diversifying a portfolio. These bonds are available in any amount to the penny ranging from $25 to $10,000 with a maximum purchase of $10,000 per year for each Social Security Number. Investors can purchase them directly through Treasury Direct on a one-off purchase or through regular recurring payroll deductions. Series EE Bonds are only available in electronic form. The interest rate on Series EE Savings Bonds varies depending on when they are purchased. The current interest rate is 2.10% (as of January 2023). The U.S. Treasury Department updates the rates on new bonds each May 1 and November 1. When you buy a saving bond, the rate is fixed until it reaches maturity 30 years later. Series EE Savings Bonds are a good choice for gifts, retirement planning, and diversification because they are guaranteed to double in value if held for at least 20 years. Even if the interest rate is low, the U.S. government will make a one-time adjustment to fulfill this guarantee. This guarantee provides assurances for investors who are planning for retirement or diversifying their portfolios with less risky assets. You cannot sell a Series EE Savings Bond until you have held it for at least one year. After that, it is completely liquid and can be cashed at any time. If you redeem the savings bond during the first five years, there is a penalty of three months' interest. After five years, there are no more penalties. Interest earned on these savings bonds can be reported yearly or all at once when the bonded is cashed in and the money is received. Investors pay federal income taxes on the earnings, but they are exempt from state and local taxes. The earnings may avoid federal taxes when used to pay for higher education expenses. Best Savings Bonds Best Savings Bonds Final Verdict Compare Providers How to Choose Savings Bonds vs. CD The Best Time to Cash Savings Bonds Are Savings Bonds a Good Investment? How Much Do Savings Bonds Cost? Methodology Our choice for the best savings bond is the Series I Savings Bond. It offers a more competitive rate of interest that adjusts with inflation and you can purchase both digital or paper versions of the bond. The interest rate adjusts every six months, which allows investors to benefit from rising inflation rates and avoid locking in a low, fixed rate when interest rates are below historical averages. You can buy digital Series I Savings Bonds in any denomination above $25 with a maximum of $10,000 per year for electronic bonds, so they are a good fit for anyone's budget. When choosing the best savings bonds for your situation, it helps to know what features are most important to you. Series I and Series EE Savings Bonds have many similarities, but there are a few key differences that can impact your decision. Savings Bonds and CDs are both popular choices for risk-averse investors. They have a lot of similarities in that they are easy to purchase and offer interest rates that are fixed for periods of time. For short-term investors of less than one year, CDs are the better choice. You cannot cash out a savings bond until you've owned it for one year. Most banks offer CDs with a variety of terms that typically range from one month to five years. There are many advantages to savings bonds though. You can purchase a savings bond today and allow it to grow for the next 30 years without worrying about what the interest rates are when your CD matures. Additionally, savings bonds offer tax advantages that CDs do not. Your interest earnings are not subject to state or local income taxes and may be exempt from Federal income taxes when used to pay for education expenses. Currently, Series I Savings Bonds also offer rates that are substantially higher than most short-term CDs. Investors can take advantage of these higher rates and have full liquidity after just one year. While there is a three-month interest penalty if you redeem a savings bond in the first five years, many longer-term CDs have interest penalties that have higher penalties. The best time to cash savings bonds is after holding them for at least five years. You cannot sell them until after you've held them for one year, and if you sell before five years, you'll owe three month's interest as a penalty. Ideally, Series EE Savings Bonds should be held for at least 20 years in order to benefit from the guarantee that they'll be worth double their face value. It depends, savings bonds can be a good addition to your portfolio for retirement. However, the interest rates tend to be low because of their government guarantees. Other investments, such as stocks, tend to outperform savings bonds over time. Investors who are looking to balance out their portfolio, reduce risk, and add guaranteed rates of return can consider adding savings bonds to their portfolios. Savings bonds are sold at face value with minimum values starting at just $25. They can be purchased in any amount to the penny above $25, including specific dollar and cents amounts, such as $25.63. The maximum savings bond face value is $10,000. To pick the best savings bonds, we analyzed the savings bonds currently offered by the U.S. Treasury Department. At this time, only two savings bonds are available for purchase, so we compared the bonds against each other. We gathered data about purchase methods,minimum purchase amounts, interest rates, penalties, maturities, taxation, and other features to determine which savings bond is best for a variety of uses. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in oureditorial policy.Best Overall & Education Planning : Series I Savings Bonds
Best Gift & Retirement Planning : Series EE Savings Bonds
Final Verdict
Compare the Best Savings Bonds
Company Type of Savings Bond Interest Rate No. of Years Minimum Purchase Maximum Purchase per year U.S. Treasury Series EE 2.10% (January 2023) fixed Updated every 6 months Guaranteed to double in value after 20 years Up to 30 years $25 $10,000 U.S. Treasury Series I 6.89% (January 2023) variable Updated every 6 months Up to 30 years $25 electronic; $50 paper $10,000 electronic; $5,000 paper How to Choose the Best Savings Bonds
Savings Bonds vs. Certificates of Deposits (CDs)
When Is the Best Time to Cash Savings Bonds?
Are Savings Bonds a Good Investment for Retirement?
How Much Do Savings Bonds Cost?
How We Chose the Best Savings Bonds
FAQs
What are the best performing funds for 2024? ›
Rank | Fund | One-year return (%) |
---|---|---|
1 | Vanguard LifeStrategy 80% Equity | 12% |
2 | Fundsmith Equity | 9.1% |
3 | L&G Global Technology Index | 44% |
4 | Royal London Short Term Money Market | 5.34% |
- High-yield savings accounts. Overview: A high-yield online savings account pays you interest on your cash balance. ...
- Long-term certificates of deposit. ...
- Long-term corporate bond funds. ...
- Dividend stock funds. ...
- Value stock funds. ...
- Small-cap stock funds. ...
- REIT index funds.
I bonds issued from May 1, 2024, to Oct. 31, 2024, have a composite rate of 4.28%. That includes a 1.30% fixed rate and a 1.48% inflation rate. Because the U.S. government backs I bonds, they're considered relatively safe investments.
What is the best bond to buy in 2024? ›The Vanguard High-Yield Corporate Fund (VWEHX) takes the top spot on our list of the best high-yield bond funds for May 2024 thanks, largely, to its low expense ratio.
Where to put 100k? ›- Park your cash in an interest-bearing savings account.
- Max out contributions to retirement accounts.
- Invest in ETFs.
- Buy bonds.
- Consider alternative investments.
- Invest in real estate.
- Money market funds.
- Dividend stocks.
- Bank certificates of deposit.
- Annuities.
- Bond funds.
- High-yield savings accounts.
- 60/40 mix of stocks and bonds.
- Max out your retirement accounts. ...
- Contribute to a health savings account (HSA) ...
- Fund a 529 college savings account. ...
- Stash it in a high-yield savings account or CD. ...
- Invest in Treasurys. ...
- Invest in an index fund.
- How to Get 10% Return on Investment: 10 Proven Ways.
- High-End Art (on Masterworks)
- Invest in the Private Credit Market.
- Paying Down High-Interest Loans.
- Stock Market Investing via Index Funds.
- Stock Picking.
- Junk Bonds.
- Buy an Existing Business.
The Euro is the world's second reserve currency which is considered the one of the safest investment. It is one of the safest currency to invest in, most millionaires and billionaire buy Swiss franc. Japan's inflation rates have been reigning low for a long time now.
How much is a $100 savings bond worth after 20 years? ›Face Value | Purchase Amount | 20-Year Value (Purchased May 2000) |
---|---|---|
$50 Bond | $100 | $109.52 |
$100 Bond | $200 | $219.04 |
$500 Bond | $400 | $547.60 |
$1,000 Bond | $800 | $1,095.20 |
What are the expected I bond rates for May 2024? ›
May 1, 2024. Series EE savings bonds issued May 2024 through October 2024 will earn an annual fixed rate of 2.70% and Series I savings bonds will earn a composite rate of 4.28%, a portion of which is indexed to inflation every six months. The EE bond fixed rate applies to a bond's 20-year original maturity.
What is the downside of an I bond? ›Key Points. Pros: I bonds come with a high interest rate during inflationary periods, they're low-risk, and they help protect against inflation. Cons: Rates are variable, there's a lockup period and early withdrawal penalty, and there's a limit to how much you can invest.
Which funds will perform best in 2024? ›Fund | Medalist Rating | Category |
---|---|---|
GQG Partners US Equity | Silver | US Large-Cap Blend Equity |
GQG Partners Global Equity | Gold | Global Large-Cap Growth Equity |
Neuberger Berman 5G Cnnctvty | Bronze | Sector Equity Technology |
IFSL Meon Adaptive Growth | Neutral | Global Large-Cap Blend Equity |
Bond name | Rating |
---|---|
9.73% BANK OF BARODA INE028A08059 Unsecured | CRISIL AAA |
12.50% GUJARAT NRE co*kE LIMITED INE110D07093 Secured | CARE Suspended |
9.55% TATA MOTORS FINANCE LIMITED INE601U08192 Unsecured | ICRA A+ |
9.48% PNB HOUSING FINANCE LTD INE572E09239 Secured | CRISIL AA |
In line with the outlook from other investment providers, the firm is forecasting a 5.7% gain in 2024 for U.S. investment-grade bonds, versus 4.9% last year and 2.3% in 2022. (All figures are nominal.) Schwab's 10-year return expectations are well below each asset class' returns from 1970 through October 2023.
Which mutual funds are best for 2024? ›The Quant Small Cap Fund (Direct) is leading the pack, boasting an impressive 42.34% return, followed closely by the Nippon India Small Cap Fund (Direct) at 36% return. The HSBC Small Cap Fund (Direct) and the HDFC Small Cap Fund (Direct) have also performed well, delivering returns of 33.73% and 31.91%, respectively.
What is the best TSP fund to invest in 2024? ›The C Fund has grown 7.49% in 2024, marking the best performance among the TSP's core funds. The small- and mid-size businesses of the S Fund posted the strongest numbers in February, gaining 6.03%. That's good enough to bring the fund 3.48% into the black in 2024.
What ETF is best for 2024? ›Ticker | Fund name | 5-year return |
---|---|---|
SMH | VanEck Semiconductor ETF | 31.19% |
SOXX | iShares Semiconductor ETF | 26.35% |
XLK | Technology Select Sector SPDR Fund | 21.30% |
IYW | iShares U.S. Technology ETF | 20.70% |
- HDFC Mid-Cap Opportunities Fund.
- Parag Parikh Flexi Cap Fund.
- ICICI Pru Bluechip Fund.
- HDFC Flexi Cap Fund.
- Nippon India Small Cap Fund.
- HDFC Balanced Advantage Fund.
- ICICI Prudential Equity & Debt Fund.
- ICICI Prudential Corporate Bond Fund.