Yes, U.S. savings bonds do increase in value. Both Series EE and Series I bonds earn interest every month, and that interest compounds every six months, so the balance grows on itself for as long as 30 years. The two series calculate interest differently, but the underlying mechanics are the same, and the bonds are backed by the full faith and credit of the United States government.1Investor.gov. Savings Bonds
How the Growth Works
The Treasury credits interest on the first day of each month and folds the accumulated interest into your principal every six months. Once that happens, the next round of interest is calculated on the larger balance.2TreasuryDirect. EE Bonds Interest earning interest, twice a year, for up to three decades.
If your bonds are electronic, you can log into TreasuryDirect on the first of the month and see the updated value. Paper bonds work the same way mechanically, but the current value doesn’t appear anywhere until you redeem the certificate.3TreasuryDirect. I Bonds
How Much Series EE Bonds Grow
Series EE bonds earn a fixed rate that is set when you buy the bond and stays locked in for its life.4eCFR. 31 CFR Part 351 Subpart B For bonds issued between November 2025 and April 2026, that rate is 2.50%.2TreasuryDirect. EE Bonds The Treasury announces new rates every May 1 and November 1.
EE bonds carry a doubling guarantee. If 20 years of the fixed rate alone haven’t gotten the bond to at least twice its purchase price, the Treasury makes a one-time adjustment at the 20-year mark to close the gap.4eCFR. 31 CFR Part 351 Subpart B That works out to an effective minimum return of roughly 3.5% per year over the first 20 years, regardless of the printed rate.
Electronic EE bonds are bought at face value, so a $100 bond costs $100 and you watch the balance climb from there. Older paper EE bonds were sold at half their face value, meaning a $100 bond cost $50 and the growth was the journey to the printed amount. The math is the same either way, but it’s worth knowing which format you’re holding so you track the progress correctly.
How Much Series I Bonds Grow
Series I bonds use a composite rate with two parts. One is a fixed rate that stays with the bond for life. The other is a variable inflation rate that resets every May 1 and November 1 based on changes in the Consumer Price Index for All Urban Consumers.5TreasuryDirect. I Bonds Interest Rates
The two pieces are combined using a set formula: the fixed rate, plus twice the semiannual inflation rate, plus the product of the two. For I bonds issued from November 2025 through April 2026, the fixed rate is 0.90% and the semiannual inflation rate is 1.56%, producing a composite rate of 4.03%.5TreasuryDirect. I Bonds Interest Rates That composite rate holds for six months before the inflation portion resets. The fixed portion never changes once you’ve bought the bond.6eCFR. 31 CFR 359.13
In a period of deflation, the inflation component can go negative and pull the composite rate below the fixed rate. The Treasury won’t let the composite rate drop below zero, though, so an I bond can’t actually lose value. Your principal and all previously earned interest are safe.5TreasuryDirect. I Bonds Interest Rates
When You Can and Can’t Cash In
Growth is only useful if you can get at it. You cannot redeem a savings bond at all during the first 12 months after purchase. The lockup applies to both EE and I bonds issued since February 2003.7eCFR. 31 CFR 351.6 Don’t put money into a savings bond that you might need before the year is up.
Between year one and year five, you can cash out, but you forfeit the last three months of interest. Redeem an I bond after 18 months and you receive 15 months’ worth of interest.8eCFR. 31 CFR 359.7 The same three-month penalty applies to EE bonds.2TreasuryDirect. EE Bonds The penalty can’t push your redemption value below what you paid; the Treasury won’t go below the issue price. After five years, the penalty is gone entirely.
When Bonds Stop Growing
Both EE and I bonds reach final maturity 30 years after the issue date. At that point, the bond stops earning interest.9eCFR. 31 CFR 351.34 For I bonds, the 30 years consist of a 20-year original maturity period plus a 10-year extension.10eCFR. 31 CFR Part 359
Final maturity also triggers a tax event. Most bondholders defer reporting interest until they receive the money, and when a bond matures, all the accumulated interest becomes taxable in that year whether you cash out or not. For an electronic bond, the Treasury moves the funds into a Certificate of Indebtedness in your TreasuryDirect account and issues a Form 1099-INT for that year’s return.11TreasuryDirect. Tax Information for EE and I Bonds Savings bond interest is subject to federal income tax but exempt from state and local income tax.12eCFR. 31 CFR 316.9
Holding a matured bond past 30 years does nothing except let inflation chip away at money that has stopped growing. Once the bond hits final maturity, redeem it and move the proceeds somewhere they can keep earning.