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How to Buy US Savings Bonds

The Only way to Purchase US Savings Bonds


Part 1: Overview of Savings Bonds
Part 2: Pitfalls and Risks of Savings Bonds
Part 3: How to Buy Savings Bonds

In the past, you could buy US Savings Bonds at banks and credit unions, but those days are behind us. The Treasury only allows purchases online or as part of your tax refund. What's more, if you want paper bonds, the only way to get them is with your tax refund.

You can still redeem paper savings bonds at most financial institutions, but getting new ones is not as easy as it used to be.

If you're looking to buy savings bonds for yourself or as a gift, let's review what your options are under the new rules.

TreasuryDirect.gov – Buy Savings Bonds Online

The Treasury Department has a nice website for buying savings bonds. The process is surprisingly easy and fast - as long as you're only buying bonds for yourself. If you’re internet-savvy, you can be the proud owner of a savings bond in less than 10 minutes. However, if you’re still figuring things out online (or if there are any technical glitches or delayed email messages) you may be in for a more frustrating experience.

I personally had a smooth experience when I bought savings bonds at Treasury Direct, but others have been less fortunate. Just be prepared to spend some time at your computer.

The first step is to create an account. You'll have to provide standard personal information such as your Social Security Number and birthday, and you'll have to set up security questions and answers much like at any other financial website. You'll also link a bank account to your TreasuryDirect account to fund your savings bond purchases. Finally, look for an email from TreasuryDirect that confirms your account and provides your account number.

Once you’re logged-in, you can buy a variety of Treasury securities. There is even a “Purchase Express” form on the welcome page if you make a habit of buying savings bonds. This option allows you to quickly add to your holdings without having to type in the same information you always type in.

Buying bonds is almost a little too easy - whether or not you use Purchase Express. I expected more information about what I was doing before actually pulling the trigger, but perhaps I just like to triple-check before clicking. If you tend to move quickly online, make sure you know what you're getting into (how long you have to keep the bonds, for example) before you confirm anything.

Buying Savings Bonds as Gifts

Savings bonds are commonly given as gifts, and you can still purchase bonds for somebody else - whether you buy online or with your tax return. Unfortunately, the process of buying online and giving a gift is cumbersome, and it just doesn't feel the same when you can't hand over the actual bond.

To buy a bond as a gift, you'll use your own TreasuryDirect account, but the recipient needs his or her own account to receive the gift (this is the main drawback of the online system). If the recipient is under the age of 18, the child's parent or guardian needs to open an account as well (and then open a "Minor Linked Account" under their own account). In addition, you'll need the recipient's Social Security Number when you buy the savings bond.

If the child's parents can't or won't open a TreasuryDirect account, you can still purchase the bonds, hold them in your own account's "Gift Box," and transfer them at a later date.

Purchase Savings Bonds with a Tax Refund

If you have your heart set on buying paper savings bonds, you can do so with your tax refund. However, you can only get Series I bonds with this method.

When you file your taxes, use Form 8888 to purchase bonds with a portion of your refund. You have to buy in $50 increments, and you can get up to $5,000 in bonds at one time. You can of course buy bonds for yourself, and you can also use your refund to purchase savings bonds as gifts; just enter the recipient's name on the form. Your paper bonds will be mailed to you, and you can eventually redeem them at a bank or credit union that works with savings bonds.

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