You can buy savings bonds from TreasuryDirect, the official U.S. government website
TreasuryDirect is the only place to purchase new savings bonds directly from the U.S. Department of the Treasury. You create an account online, link a bank account, and buy bonds through the website. This is the primary route most people take, and it cuts out any middleman or fee.
You can also buy savings bonds through a bank or brokerage firm, but they typically charge a fee for the service and may have higher minimum purchases. Since TreasuryDirect charges nothing and has no account minimums, it is the most straightforward option for most buyers.
Key Takeaways
- TreasuryDirect (treasurydirect.gov) is the official government site where you buy new savings bonds with no fees or account minimums.
- You need a Social Security number, a valid email address, and a U.S. bank account to open a TreasuryDirect account.
- Series EE and Series I bonds are the two types available to individual buyers, and you can buy as little as $25 per bond.
- Banks and brokerages sell savings bonds too, but they charge fees that TreasuryDirect does not.
- Bonds you buy through TreasuryDirect are held electronically; you do not receive a physical certificate in the mail.
How to set up a TreasuryDirect account
Go to treasurydirect.gov and click "Open an Account." You will need your Social Security number, a valid email address, and a U.S. bank account. The site will ask you to create a username and password, then verify your identity by answering security questions based on your credit history.
Once your account is open, you link your bank account for purchases and redemptions. TreasuryDirect uses this account to debit money when you buy bonds and to deposit funds if you sell them early. The whole setup takes about 15 minutes.
After your account is active, you can buy bonds when ready. There is no waiting period, and you can purchase bonds any business day the Treasury is open.
What you can buy and minimum amounts
TreasuryDirect sells two types of savings bonds to individuals: Series EE and Series I. The minimum purchase for either type is $25, and you can buy in $1 increments above that (so $25, $26, $27, and so on). There is no maximum per purchase, though TreasuryDirect does set annual limits on how much you can buy in a calendar year.
Series EE bonds earn a fixed interest rate set by the Treasury every six months. Series I bonds earn a combined rate made up of a fixed portion plus an inflation rate that changes every six months. The choice between them depends on whether you expect inflation to rise or prefer the certainty of a fixed rate.
Both types are held electronically in your TreasuryDirect account. You will not receive a paper bond in the mail. Your account statement shows your bonds, their purchase date, current value, and maturity date.
Buying bonds through banks and brokerages
Most major banks and investment brokerages, including Fidelity, Schwab, and Vanguard, sell savings bonds. The process is similar to buying through TreasuryDirect: you place an order through your account and the bonds are held electronically.
The trade-off is cost. Banks and brokerages typically charge a fee per bond purchase, ranging from a few dollars to $25 or more depending on the firm. Some also set higher minimum purchases than TreasuryDirect. If you are buying a single $25 bond, a $10 fee cuts deeply into your return. If you are buying $10,000 worth, the fee matters less.
One reason to use a bank or brokerage is convenience: if you already have an account there and manage other investments through it, buying bonds in the same place may be simpler than opening a separate TreasuryDirect account. But for cost, TreasuryDirect is always the better choice.
Annual purchase limits and how they work
The Treasury sets an annual limit on how much you can buy in savings bonds each calendar year. As of now, the limit is $10,000 per person per calendar year through TreasuryDirect. This limit resets on January 1 each year.
The $10,000 limit applies to electronic bonds (Series EE and Series I combined). If you want to buy more, you can purchase up to an additional $5,000 in paper Series EE bonds using your federal tax refund, but this requires filing a paper form with your tax return and is rarely done.
Banks and brokerages may have their own limits separate from the Treasury's annual cap. Check with your firm if you plan to buy a large amount.
What happens after you buy a bond
Once you purchase a bond through TreasuryDirect, it appears in your account when ready. You can see its purchase price, the interest rate, and the maturity date. Interest accrues monthly, though you do not receive payments until you cash the bond or it reaches final maturity.
You can cash in a savings bond anytime after you own it for one year. If you cash it before five years have passed, you lose the last three months of interest as a penalty. After five years, you can cash it with no penalty. Bonds continue to earn interest for up to 30 years, depending on the series.
To redeem a bond, log into your TreasuryDirect account, select the bond, and request a redemption. The money goes back to your linked bank account within a few business days.
Taxes on savings bond interest
Interest earned on savings bonds is subject to federal income tax, but not state or local tax. You do not pay tax on the interest each year; instead, you pay it all at once when you cash the bond or when it reaches final maturity.
This tax-deferral feature is one reason people buy savings bonds. You can hold a bond for years, let interest compound, and delay the tax bill until you need the money. When you do cash it, you report the total interest earned on your federal tax return for that year.
There is one exception: if you use Series EE or Series I bond proceeds to pay for may have access to education expenses, you may be able to exclude the interest from federal income tax. This requires meeting specific conditions and filing Form 8815 with your tax return.
Frequently Asked Questions
Can I buy savings bonds as a gift for someone else?
Yes. You can open a TreasuryDirect account in another person's name if you have their Social Security number and permission. Some people buy bonds as gifts for children or grandchildren. The bond is registered in that person's name, and they own it outright.
What is the difference between Series EE and Series I bonds?
Series EE bonds earn a fixed interest rate that does not change. Series I bonds earn a combined rate: a fixed portion plus an inflation rate that adjusts every six months based on the Consumer Price Index. If you think inflation will rise, Series I may pay more. If you prefer predictability, Series EE is simpler.
Can I sell a savings bond before maturity?
Yes, you can redeem a bond anytime after owning it for one year. If you cash it before five years, you forfeit the last three months of interest. After five years, there is no penalty. You cannot sell a bond to another person; you can only redeem it back to the Treasury.
Do I need a minimum amount to open a TreasuryDirect account?
No. There is no account minimum. You can open an account and buy a single $25 bond if you want. However, you do need a valid U.S. bank account to link to the account for purchases and redemptions.
What if I lose access to my TreasuryDirect account?
Contact TreasuryDirect customer service through the website. They can help you reset your password, recover your account, or answer questions about your bonds. You can also call 844-284-2676 during business hours.