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<center><h2>What's the Difference Between<br> I Bonds and EE Bonds?</h2></center>
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<font color="#FF0000"><b>Note:</b> I Bonds will be available September 1,
1998.</font><p>
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The chart below will help you understand, at a glance, the major differences
between I Bonds and EE Bonds. If you want to learn more, see our main menus
for <a href="/sav/sbiinvst.htm">I Bonds</a> and <a href="/sav/savinvst.htm">EE
Bonds</a>.
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<td> </td>
<td align="center"><b>EE Bond</b></td>
<td align="center"><b>I Bond</b></td>
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<td rowspan="3" valign="top"><b>Features</b></td>
<td>Issued at 50% of face value. (A $100 EE Bond costs $50.)</td>
<td valign="top">Issued at face value. (A $100 I Bond costs $100.)</td>
</tr>
<tr>
<td valign="top">Offered in 8 denominations ($50, $75, $100, $200, $500,
$1,000, $5,000, and $10,000).</td>
<td>Initially offered in 6 denominations ($50, $75, $100, $500, $1,000,
and $5,000). Two additional denominations will be available May 1999
($200 and $10,000).</td>
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$15,000 issue price ($30,000 face value) annual purchase limit per person.
</td>
<td valign="top">
$30,000 annual purchase limit per Social Security Number.
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<td rowspan="5" valign="top"><b>Interest</b></td>
<td valign="top">Calculated as 90% of 6-month averages of 5-year Treasury
Securities yields.</td>
<td>Calculated as an earning of a fixed rate of return and a semiannual
inflation rate based on CPI-U.</td>
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<td>Rates announced every May 1 and November 1.</td>
<td valign="top">Rate Announcement: Same as EE.¹</td>
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<td>Guaranteed to reach face value in 17 years.</td>
<td valign="top">No guaranteed level of earnings.</td>
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<td valign="top">Increases in value monthly and compound semiannually.
Interest is paid when the bond is redeemed.</td>
<td>Generally increases in value monthly and interest compounds
semiannually (except in periods of deflation when the bond value
could remain unchanged). Interest is paid when the bond is redeemed.</td>
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<td>Earn interest for up to 30 years.</td>
<td valign="top">Life span: Same as EE.</td>
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<td><b>Exchange</b></td>
<td valign="top">Can be exchanged for Series HH savings bonds.</td>
<td>Cannot be exchanged for any other series of savings bonds.</td>
</tr>
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<td rowspan="4" valign="top"><b>Cashing</b></td>
<td>Can be redeemed after first 6 months.</td>
<td valign="top">Same as EE.</td>
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<td>A 3-month interest penalty applies to bonds redeemed during
the first 5 years.</td>
<td valign="top">Same as EE.</td>
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<td>Financial institution reports interest earnings (difference
between redemption value and purchase price) on IRS form 1099-INT.
Savings bonds are exempt from state and local income taxes.</td>
<td valign="top">Same as EE.</td>
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<td>Eligible for tax benefits upon redemption when used for
qualified education expenses.</td>
<td valign="top">Same as EE.</td>
</tr>
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<p>
<a href="/sav/sbiinvst.htm">Return to I Bond Main Menu</a>
<p>
¹The first rate will be announced by September 1, 1998. In the future,
rates will be announced every May 1 and November 1.
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<font size=-3><i>Updated August 12, 1998</i></font>
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