Unlike the other types of Treasury securities, savings bonds can be owned by kids. Also, savings bonds are non-marketable, which means they are registered to a specific owner and cannot be bought and sold to other people in the "secondary market" by brokers and dealers. Paper savings bonds used to be bought in different denominations. Bonds were available with a face value of $25, $50, $75, $100, $200, $500, $1000, $5000 and $10,000. You could buy them from most commercial banks in paper form or directly from the Treasury Department in electronic form. Savings bonds that are electronic can be bought for as little as $25 or any amount up to $5000 and held in a secure TreasuryDirect® account.
Since January 1, 2012, paper savings bonds are no longer available at banks or other financial institutions. Paper Series I bonds can still be bought with IRS tax refunds, but Series EE bonds are available only in electronic form.
There are two types of savings bonds currently available.
- Series EE bonds
- will pay a fixed (or set) interest rate
- are available as electronic bonds
- earn interest each month
- are guaranteed to at least double in value in 20 years
- earn interest for 30 years
When you used to buy a paper Series EE bond, you paid half the face value for the bond. Now, you pay the total face value for electronic EE bonds. At the end of the savings bond's term, you cash it in. Regardless if you paid half or total face value, you will get the face value plus the interest that has built up over the years. You can cash in your bond after one year from buying it and get back the money you paid for it. You will not get all the interest that has built up if you cash in a savings bond before it is five years old.
- Series I bonds
- Paper (through IRS tax refunds) and electronic bonds are sold at face value
- can be cashed in after one year from buying it for the amount you paid for it (but you won’t get all the interest that has built up if you cash in a Series I bond before it is five years old)
- earn interest for 30 years
The Series I bond has two interest rates. One is a fixed rate that is set when you buy your bond. The other rate is connected to the inflation rate (a rise in the prices you pay for the things you buy). If there is inflation, the interest rate goes up. If prices are falling, called “deflation,” the interest rate goes down.
FAQs
How to get the most value from your savings bonds
| Face Value | Purchase Amount | 30-Year Value (Purchased May 1990) |
|---|
| $50 Bond | $100 | $207.36 |
| $100 Bond | $200 | $414.72 |
| $500 Bond | $400 | $1,036.80 |
| $1,000 Bond | $800 | $2,073.60 |
TreasuryDirect.gov is the one and only place to electronically buy and redeem U.S. Savings Bonds. We also offer electronic sales and auctions of other U.S.-backed investments to the general public, financial professionals, and state and local governments.
Is it hard to open a TreasuryDirect account? ›
It takes just 3 steps to open a TreasuryDirect Account.
Provide personal information, including: Tax ID Number (SSN or EIN) E-mail Address. Bank Account and Routing Number.
Do I need a separate TreasuryDirect account for my child? ›
The Minor account is linked to your primary TreasuryDirect account and only you, as the custodian, can access the account. You, acting on behalf of the minor, may purchase, redeem, receive gift deliveries, and perform other transactions within the account on behalf of the minor.
How much is a $50 Patriot bond worth after 20 years? ›
After 20 years, the Patriot Bond is guaranteed to be worth at least face value. So a $50 Patriot Bond, which was bought for $25, will be worth at least $50 after 20 years. It can continue to accrue interest for as many as 10 more years after that.
Do savings bonds double every 7 years? ›
Series EE savings bonds are a low-risk way to save money. They earn interest regularly for 30 years (or until you cash them if you do that before 30 years). For EE bonds you buy now, we guarantee that the bond will double in value in 20 years, even if we have to add money at 20 years to make that happen.
What is the downside of Treasury I bonds? ›
Key Points. Pros: I bonds come with a high interest rate during inflationary periods, they're low-risk, and they help protect against inflation. Cons: Rates are variable, there's a lockup period and early withdrawal penalty, and there's a limit to how much you can invest.
How long does it take to get money from TreasuryDirect? ›
You just bought a security from the U.S. Treasury. Securities are generally issued to your account within two business days of the purchase date for savings bonds or within one week of the auction date for Bills, Notes, Bonds, FRNs, and TIPS.
Is TreasuryDirect worth it? ›
If you're looking for a safe place to park your cash, you may want to consider T-bills or other government securities. Since your return will be lower than the return of riskier fixed-income and equity investments, using TreasuryDirect is smart, since it cuts out the middleman — and eliminates any commissions and fees.
Is there a fee for TreasuryDirect? ›
TreasuryDirect is free. There are no fees, no matter how much or how little you invest. You may hold both savings bonds and Treasury marketable securities in TreasuryDirect. Your securities in TreasuryDirect are electronic, so you don't have to worry about them getting lost, stolen, or damaged.
The Zero-Percent Certificate of Indebtedness (Zero-Percent C of I or simply, C of I) is a Treasury security that does not earn any interest. It is intended to be used as a source of funds for purchasing traditional Treasury securities.
How do you avoid tax on Treasury bonds? ›
The Treasury gives you two options:
- Report interest each year and pay taxes on it annually.
- Defer reporting interest until you redeem the bonds or give up ownership of the bond and it's reissued or the bond is no longer earning interest because it's matured.
While not the flashiest gifts, I bonds are a safe investment designed to keep pace with inflation. They grow for decades and can provide kids with a source of cash as they transition to adulthood. Today's savings bonds are more likely to be electronic than paper. But they still make great gifts.
What happens to a TreasuryDirect account when the owner dies? ›
For an estate that is being administered, the legal representative of the estate must open a TreasuryDirect account in the name of the estate in order to conduct transactions. The legal representative of the estate may then conduct any transactions that are available to an individual account owner.
Can a grandparent open a TreasuryDirect account for grandchild? ›
A child under 18 can have a TreasuryDirect account if the child's parent or other adult custodian has a TreasuryDirect account and sets up a linked account for the child. In TreasuryDirect, you can give anyone either EE or I savings bonds.
How long does it take for a $100.00 bond to mature? ›
U.S. Savings Bonds mature after 20 or 30 years, depending on the type of bond: Series EE bonds mature after 20 years. They are sold at half their face value and are worth their full value at maturity. Series I bonds are sold at face value and mature after 30 years.
What is the average bond return for 30 years? ›
30 Year Treasury Rate is at 4.52%, compared to 4.59% the previous market day and 3.87% last year. This is lower than the long term average of 4.74%.
Do savings bonds increase in value after 30 years? ›
If you moved your EE bond into a TreasuryDirect account, we pay you for the bond as soon as it reaches 30 years and stops earning interest. If you still have a paper EE bond, check the issue date. If that date is more than 30 years ago, it is no longer increasing in value and you may want to cash it.
Should I wait 30 years to cash in savings bonds? ›
Although they technically mature after 20 years, these bonds actually don't expire for 30 years. You'll keep earning interest for an extra decade. As long as you cash in your bond at the maturity date, you can guarantee your investment will double.
