Yes, you can still buy savings bonds, but only through TreasuryDirect

The U.S. Treasury stopped selling savings bonds through banks and post offices in 2011. Today, the only way to buy new savings bonds is online at TreasuryDirect.gov, the official government website. You cannot walk into a bank or post office and purchase them anymore — that channel closed permanently.

You can buy two types of savings bonds through TreasuryDirect: Series EE bonds and Series I bonds. Series EE bonds earn a fixed rate of interest for 30 years. Series I bonds earn interest that adjusts every six months based on inflation, which makes them useful when prices are rising. Both require you to hold them for at least one year before you can cash them in, and you pay a penalty if you cash them in before five years have passed.

The minimum purchase is $25 per bond, and you can buy up to $10,000 per calendar year in each series through TreasuryDirect. If you want to buy more than that, you can purchase up to $5,000 per year in paper Series I bonds through your federal tax refund, though this option is less common now.

Key Takeaways

  • TreasuryDirect.gov is the only place to buy new savings bonds directly from the U.S. Treasury.
  • Series EE bonds pay a fixed interest rate, while Series I bonds adjust every six months to keep pace with inflation.
  • You must hold a savings bond for at least one year before cashing it in, and you lose three months of interest if you cash it before five years.
  • The annual purchase limit is $10,000 per series per person through TreasuryDirect, or up to $5,000 in paper Series I bonds through a tax refund.

Setting up a TreasuryDirect account

Before you can buy any savings bonds, you need 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 (checking or savings). The account itself is free.

The registration process takes about 15 minutes. You will create a username and password, verify your email, and link your bank account. TreasuryDirect will make two small deposits to your account — usually under $1 each — within a few business days. You then log back in and confirm those amounts to prove you own the account. This step prevents fraud.

Once your account is verified, you can buy bonds when ready. You do not need to wait for anything else. The money comes directly from your linked bank account.

How to purchase Series EE and Series I bonds

After you log into TreasuryDirect, click "BuyDirect" and select which type of bond you want. You will see the current interest rate for that bond type — this rate is set by the Treasury and changes every six months for Series I bonds, but stays the same for the life of a Series EE bond.

Enter the dollar amount you want to invest. Remember that $25 is the minimum, and you can buy in any increment above that. The system will show you how many bonds you are purchasing (each $25 increment equals one bond). Choose whether you want the bonds registered in your name only or in your name and another person's name jointly. Then review your order and confirm.

The money leaves your bank account within one business day. Your bonds appear in your TreasuryDirect account when ready, though the official issue date is the first day of the month in which you bought them. You can check your bond balances and interest earnings anytime by logging into your account.

When you can cash in your bonds and what happens if you cash early

You can cash in a savings bond anytime after you have owned it for one year. If you cash it in before five years have passed, you lose the last three months of interest. For example, if you bought a bond in January and cashed it in March of the following year (14 months later), you would receive interest only through December — three months would be forfeited.

After five years, you can cash the bond without any interest penalty, though you still receive all interest earned up to that point. Most people hold savings bonds much longer — often 10, 20, or 30 years — because the interest keeps compounding and the bonds are backed by the U.S. government.

To cash in a bond, log into TreasuryDirect, select the bond, and request redemption. The money goes back to your linked bank account within a few business days. You will receive a 1099-INT form at tax time showing the interest you earned that year.

Understanding the difference between Series EE and Series I bonds

Series EE bonds earn a fixed interest rate that the Treasury sets when you buy the bond. That rate stays the same for the entire 30-year life of the bond. Currently, the Treasury announces new EE rates every six months, so the rate you get depends on when you buy. If you buy in January, you lock in the January rate. If you buy in July, you lock in the July rate. This makes EE bonds predictable — you know exactly how much interest you will earn.

Series I bonds earn interest in two parts: a fixed rate (set when you buy) plus a variable rate that changes every six months based on inflation. The variable part is tied to the Consumer Price Index, which measures how fast prices are rising. When inflation is high, your I bond earns more. When inflation is low, your I bond earns less. The fixed part never changes. This makes I bonds useful when you are worried about inflation eating into your savings.

Right now, Series I bonds typically earn more than Series EE bonds because inflation has been elevated. But that can change. If you want may provide, predictable returns, choose EE. If you want protection against inflation, choose I.

Tax treatment of savings bond interest

The interest you earn on savings bonds is subject to federal income tax, but it is not subject to state or local income tax. You do not pay the tax when you cash the bond — instead, you report the interest on your federal tax return for the year you cash it in.

You have a choice about when to report the interest. You can report it all in the year you cash the bond, or you can report it each year as it accrues (even though you have not cashed the bond yet). Most people choose to report it all at once when they cash the bond, because that is simpler. TreasuryDirect will send you a 1099-INT form showing how much interest you earned.

There is one special tax break: if you use the bond proceeds to pay for may have access to education expenses (tuition and fees at an accredited school), you may be able to exclude some or all of the interest from your taxable income. This only works if you meet specific requirements, including income limits. Talk to a tax professional if you think this applies to you.

What happens to bonds you already own

If you own older savings bonds — ones you bought years ago through a bank or post office — you still own them and they are still earning interest. You do not have to do anything. Those bonds will continue to earn interest until they reach their final maturity date, which varies by series and issue date.

You can cash in old bonds anytime by taking them to a bank or by mailing them to the Treasury. Some banks will not cash older bonds, so call ahead. If you mail them, send them certified mail to the Bureau of the Fiscal Service address listed on the Treasury website. You will receive a check in the mail.

If you have lost track of bonds you own, you can search for them on TreasuryDirect by logging in, or you can search the Treasury's unclaimed property database at Treasurydirect.gov. Bonds do not expire — they just stop earning interest after their final maturity date.

Frequently Asked Questions

Can I buy savings bonds as a gift for someone else?

Yes. You can register a bond in another person's name or in both your names jointly. If you register it in their name only, they own it and can cash it without your permission. If you register it jointly, either of you can cash it. You can also buy bonds through TreasuryDirect and have them issued as a gift, though the recipient will need their own TreasuryDirect account to manage them.

What is the difference between paper bonds and electronic bonds?

Paper Series I bonds can be purchased through your federal tax refund (up to $5,000 per year), and you receive them by mail. Electronic bonds are purchased through TreasuryDirect and exist only in your online account. Electronic bonds are easier to manage and you can buy them anytime. Paper bonds are harder to track and cash in, but some people prefer having a physical certificate.

Can I lose money on a savings bond?

No. The principal you invest is may provide by the U.S. government. The worst that can happen is that interest rates are very low, so you earn very little. But you will never get back less than you put in. This makes savings bonds one of the safest places to keep money.

How long does it take to get my money after I cash a bond?

If you cash through TreasuryDirect, the money goes to your linked bank account within a few business days. If you cash a paper bond at a bank, you get the money when ready. If you mail a paper bond to the Treasury, allow two to four weeks for processing and mailing your check.

Can I buy savings bonds in a retirement account like an IRA?

No. Savings bonds cannot be held inside an IRA or 401(k). You can only buy them through a regular TreasuryDirect account in your own name or jointly with another person. However, you can use money from a retirement account to buy bonds outside the account if you withdraw it.