The Best Savings Bonds for 2020

Savings bonds are an ideal way to invest because they are backed by the United States Treasury and inflation determines the variable interest rate, which means the amount your money earns can grow as the market fluctuates. When savings bonds turn liquid after a year, you’ll have the choice as to whether you want to keep your money in bonds or move it to bank certificates of deposit.

If you’ve been considering this type of investment, this may be the time to take the leap. The U.S. Bureau of Labor Statistics announced on December 13, 2019, that prices are on the rise again, with a 0.2% increase on fuel prices and a 0.2% increase in export prices. If you want to invest in savings bonds for your portfolio, there are plenty of options, so it’s important to educate yourself on what type may be right for you.

The 3 Best Savings Bonds

Series I: Best for the new investors

Series I savings bonds are an excellent option for new investors because they are low-risk. This type of savings bond is supported by the United States Treasury and using IRS form 8888. Series I bonds allow you to turn your cash into an investment that’s safe from inflation while you earn interest from the government.

Series I bonds have a term of 30 years, and your interest will be determined by a fixed interest rate and an inflation interest rate that changes twice each year. You must own your bond for one year before you can sell it, but the tradeoff will be that you have a shelter for your cash and you can give the volatile market a chance to even out while you fine tune your investment strategy.

Series EE: Best for the mobile investor

The Series EE bond is designed for more advanced investors and allows you to take advantage of the benefits of both fixed rates and variable rates. Like the Series I bonds, EE bonds use both a fixed rate and a variable rate that fluctuates with inflation. Series EE bonds guarantee to double your investment within your term,  but it’s often a 20 year investment until the bonds reach maturity.

Once your bond has matured, you have the option to commit to another 10 years or cash out the principal. EE bonds are no longer available in paper format, though, so you must purchase them electronically.

T-Bond: Best for the savvy investor

Officially known as Treasury bonds, T-Bonds are issued for a 30-year term and come in denominations of $100. T-Bonds are riskier investments because both the price and interest rate is subject to an auction, and the price is reliant upon the interest rate and yield until maturity. If there is any previously accrued interest on a bond that you purchase, the Treasury will add the cost to your next interest payment. Upon maturity of your bond, you can choose to redeem it or reinvest it.

Bond TypeAnnual Purchase AmountInterest/APRRestrictions

Series I

Online max: $10,000

Paper max using tax refund: $5,000


Limited purchase amounts

Minimum of a 1-year ownership

3-month penalty for sale of new bonds

Series EE

$25 to $10,000


Long-term investment

Restricted to a single owner 

Cannot be resold within another market

T-Bond$5 million competitive bid per household4.25%

Subject to auction

30-year term

Savings Bonds vs Stocks

Though commonly referenced together, savings bonds and stocks are two completely different types of investments. When you own stock in a company, you own part of that company. The purchase is made via a stock exchange and documented by the federal Security and Exchange Commission (SEC).

Bonds work differently. When you purchase a bond, that company is now indebted to you. You agree to give the company time to pay that debt and you are compensated for your wait. The amount you earn depends on the fixed interest rate at which you purchased the bond. Bonds are a more user-friendly investment model that typically offers less risk with more rewards.

Savings Bonds vs CDs

Certificates of deposits, or CDs, are another popular, low-risk investment strategy. You are essentially making a loan with a bond, but a CD is an investment with a bank that earns money based on the amount of time you agree to leave your funds in the account. With a CD, you get to keep your cash safe while also earning interest for its safekeeping. While bonds cannot be sold for a minimum of one year, a CD is a simple investment that can be cashed in at any time, though you may face a penalty for withdrawing your money before the term is up.

Each bank has its own policies regarding the exact timeline for its CDs, with some lasting as little as a month. A CD is a solid way to earn interest, but does not typically bring the rewarding, long-term investment yields of a bond.

Savings Bonds vs Treasury Bonds

It is easy to confuse savings bonds and Treasury bonds because they are both issued by the United States government and offer 30-year terms. A Treasury bond is sold at auction, though, which is also where its terms and rates are decided. There is a $5 million maximum per household, and if there is an accumulated debt on that bond, the bidder assumes that debt until the term is complete.

Savings bonds are handled through a more simplified process with a bank and you are limited to a $5,000 investment for each kind of savings bond. These bonds use a paper form that you can receive from your bank, or you have the option to use your payroll savings to purchase savings bonds.

Mini Reviews of the 3 Best Savings Bonds

Series I review

This type of savings bond is an investment in the conventional way, with paper-based sales from your bank and minimum holding requirements of just one year.

Series EE review

A little patience goes a long way when your fixed-term Series EE bonds double your investment, but you’ll have to leave your money in the bond for a much longer span of time than with Series I bonds.

T-Bond review

Follow the market and expand your portfolio immediately by bidding during regular auctions and making electronic buys, but while the rewards can be much higher, so can the risk.

The Final Word

With savings bonds, you can invest your way and on your time. More traditional investors appreciate the simple familiarity of a paper investment made within their bank’s local branch. Others prefer the convenience of investing from home, using their Wi-Fi to buy and sell their investments. You can even live like a Wall Street investor for a day as you bid on coveted treasury bonds during the thrill of an auction. With the backing of the American government behind them, savings bonds can grow your portfolio and change your life in no time at all.