Dear Dr. Don,

I have been holding on to six Series I savings bonds for seven to eight years. Should I cash them in now and get a Series EE for a better investment? I am really not that sure how this works.

— Tashimia Timing

Dear Tashimia,

You’re doing just fine where you are in these Series I savings bonds, which earn interest for 30 years. Cashing them in now to buy Series EE savings bonds isn’t a very good financial move. Series EE bonds purchased between now and Oct. 31 earn a fixed yield of 1.1 percent. You’re making about that much just on the fixed component of your Series I savings bonds. Hold the Series EE savings bond for 20 years and you’ll earn about 3.53 percent on the bonds, but your Series I bonds are still likely to outperform the Series EE over that time frame.

Series I savings bond returns are based on two different yields: a fixed-yield component that is the same over the life of the bond, and an inflation-yield component that changes every six months and is based on changes in the Consumer Price Index. If your bonds are seven to eight years old, they were issued in 2003-2004 and their fixed component is either 1 percent or 1.1 percent.

The TreasuryDirect Web page on I savings bonds rates and terms provides a table with the fixed components on Series I bonds since the bonds were first issued in 1998. You can see how the fixed component has declined over time. Still, the best way to track your bonds over time is to use the Savings Bond Wizard.

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