Your EE Bond's Guaranteed Doubling Is Worth 3.53% a Year. A 20-Year Treasury Pays 5.25%.

“Guaranteed to double.” That is the entire pitch on a Series EE savings bond, and the guarantee is real. Treasury will make your $10,000 worth $20,000 in 20 years even if the interest never gets there on its own.

Price the guarantee before you take it. Doubling your money in 20 years is 3.53% a year. On September 4, the 20-year Treasury yielded 5.25%.

Same issuer. Same 20-year commitment. Almost two points apart.

The 2.40% is a decoy

An EE bond bought between May 1 and October 31 this year carries a fixed rate of 2.40%, locked for the life of the bond. Treasury’s own announcement adds the promise: “At 20 years, the bonds will be worth at least two times their purchase price.”

The words doing the work are “at least.” At 2.40%, compounding twice a year, $10,000 grows to about $16,115 over two decades. Treasury then writes a one-time adjustment for the missing $3,885 on your 20-year anniversary and calls it doubled.

That adjustment is the product. The headline rate is scenery.

Run it against the note

Put the same $10,000 into a 20-year Treasury note at 5.25% and you collect $525 a year. Spend every one of those payments the week it arrives, reinvest nothing, and you are still holding $20,500 at year 20. You beat the guaranteed doubling by doing nothing with the money at all.

Reinvest the payments at that same rate and you finish near $28,000.

Verdict: at today’s yields, dumb. Not because the guarantee is fake. Because the market is clearing it by a mile, and Treasury is on the other side of both trades.

Here’s the catch that makes it worse. The doubling only lands if you hold the full 20 years. Cash out at year 15 and you get 2.40%, nothing more. This is the rare bond where selling early forfeits the whole reason you bought it.

Do this

If you have money you genuinely will not touch for two decades, buy the note, not the bond.

If you want the cash liquid instead, keep it in a high-yield savings account and check what you are actually earning. Our savings rankings and the savings calculator will show you what any of these compound to over 20 years, which is the only comparison that matters here.

If it is inflation you want covered rather than a fixed rate, I bonds are the other Treasury product, and their fixed rate resets on November 1. We made the case for waiting for that reset.

The fine print

One honest point for the EE bond: federal tax on savings bond interest can sit deferred until you cash it, while note payments are taxed the year they land. Both are exempt from state and local income tax, so that piece is a wash. TreasuryDirect also says using the money for higher education may keep you from paying federal income tax on the interest.

The rest: no cashing for 12 months, a three-month interest penalty before year five, and a $10,000 annual cap per Social Security number.

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