when considering investing in u s savings bonds investors often compare series i bonds and series ee bonds while both bond types are backed by the full faith and credit of the u s government and offer a safe low risk investment option there are several key differences between the two 
one of the most significant differences between i bonds and ee bonds lies in how their interest rates are determined i bonds earn a combination of a fixed rate which remains constant throughout the life of the bond and a variable inflation rate that is adjusted twice a year based on changes in the consumer price index cpi this means that the interest rate on i bonds can fluctuate over time providing investors with protection against inflation on the other hand ee bonds issued after may 2005 earn a fixed interest rate that remains the same for the life of the bond this rate is determined at the time of purchase and is generally lower than the composite rate offered by i bonds however ee bonds come with a unique guarantee if held for 20 years they will double in value effectively providing a 3 5 annual return 8both i bonds and ee bonds have purchase limits but they differ slightly investors can purchase up to 10 000 in electronic i bonds per year for each social security number with an additional 5 000 in paper i bonds if using their tax refund ee bonds have an annual purchase limit of 10 000 in electronic form per social security number but there is no additional purchase limit for paper ee bonds i bonds can be purchased in any denomination starting at 25 with a maximum of 10 000 per transaction ee bonds can be purchased in denominations ranging from 25 to 10 000 both i bonds and ee bonds have a 30 year maturity period composed of an original 20 year maturity followed by a 10 year extended maturity period however there are differences in their redemption rules both ee and i bonds must be held for a minimum of one year before they can be redeemed and if they are redeemed within the first five years investors forfeit the most recent three months of interest both i bonds and ee bonds offer certain tax benefits the interest earned on these bonds is subject to federal income tax but exempt from state and local taxes additionally if the proceeds from either bond type are used to pay for qualified higher education expenses the interest may be tax free at the federal level i bonds are often favored by investors seeking protection against inflation as their variable interest rate helps preserve purchasing power over time they may be particularly attractive during periods of high inflation ee bonds with their fixed interest rate and guaranteed doubling in value after 20 years may appeal to investors with a longer investment horizon who prioritize predictable returns 