. . . "EE" bonds gain interest at a rate which is computed much differently than "I" bonds. Over the years, the method of computing the interest rate has changed. But effective May 1, 1997, the formulae is as follows: First the AVERAGE interest rate for Five-Year Treasury Bills (T-Bills) for the prior six month period is established. That number is then multiplied by 90%. This becomes the new "EE" bonds interest rate for the upcoming six month period.

 

. . . In a period of rising inflation, the interest rates on T-Bills will probably rise as well. Therefore, since the "EE" bond rate is directly affected by the T-Bill rate, and if T-Bill rates are rising along with the rate of inflation, then the "EE" bond interest rate will also rise. Conversely, during a period where inflation is falling, the T-Bill rate will probably fall, and the "EE" bond interest rate will decrease as well.

Purchasing "I" Bonds and their Denominations

Currently, "I" bonds can be purchased in $50, $75, $100, $200, $500, $1,000, $5,000 and $10,000 denominations. They should be able to be purchased from any financial institution where "EE " bonds are sold. "I" bonds can also be purchased via a payroll savings plan.