You buy savings bonds directly from the U.S. Treasury through TreasuryDirect, not from a bank or broker

The only place to purchase new U.S. savings bonds is TreasuryDirect, the Treasury Department's online platform. You cannot buy them from a bank, brokerage firm, or financial advisor. You set up an account at treasurydirect.gov, link a bank account, and buy bonds electronically. There is no paper option for new purchases — the Treasury stopped issuing paper savings bonds to most buyers in 2011.

You need a Social Security number, a valid email address, and a U.S. bank account to open a TreasuryDirect account. The account setup takes about 15 minutes. Once approved, you can buy bonds immediately, and they are held in your account electronically.

Key Takeaways

  • TreasuryDirect (treasurydirect.gov) is the only place to buy new savings bonds, and you must set up an account with your Social Security number and a U.S. bank account.
  • Series I bonds and Series EE bonds are the two types available to individual buyers, and they have different interest rates and holding periods.
  • You can buy as little as $25 per bond, and the Treasury sets purchase limits each calendar year — currently $10,000 per series per person per year.
  • Bonds are held electronically in your TreasuryDirect account and mature over time; you redeem them through the same account when you need the money.
  • Interest accrues monthly but is not paid out until you redeem the bond, and you owe federal income tax on the interest when you cash it in.

Setting 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 (checking or savings). The Treasury uses your email to send account notifications and statements.

During setup, you create a username and password and link your bank account for purchases and redemptions. The Treasury verifies your identity by asking security questions based on your credit history. The whole process takes 10 to 15 minutes, and your account is usually active the same day.

Once your account is open, you can buy bonds anytime. You do not need to wait for a specific date or enrollment period.

Choosing between Series I and Series EE bonds

Series I bonds earn interest in two parts: a fixed rate set by the Treasury and a variable rate tied to inflation. The combined rate changes every six months. I bonds protect you against inflation but have a lower may provide minimum. You must hold an I bond for at least one year, and if you redeem it within five years, you lose the last three months of interest as a penalty.

Series EE bonds earn a fixed interest rate set by the Treasury and locked in for the life of the bond. The rate is lower than I bonds but does not change. EE bonds also require a one-year holding period and have the same three-month interest penalty if redeemed within five years. EE bonds are a simpler choice if you want predictability.

The Treasury announces new rates for both series every six months (May and November). Check treasurydirect.gov before you buy to see the current rates and decide which type fits your situation.

Purchase limits and minimum amounts

The minimum purchase is $25 per bond. You can buy in $25 increments up to your annual limit. The Treasury sets an annual purchase limit of $10,000 per series per person per calendar year. This means you can buy up to $10,000 in Series I bonds and a separate $10,000 in Series EE bonds in the same year — a total of $20,000.

The limit resets on January 1 each year. If you buy $8,000 in I bonds in December, you can buy another $2,000 in I bonds in January. The limit applies to you as an individual; if you are married, your spouse has their own separate $10,000 limit per series.

You can also buy paper Series I and EE bonds with your federal income tax refund through IRS Form 8888, but this is a separate transaction from TreasuryDirect and has its own rules.

How interest works and when you get paid

Savings bonds earn interest every month, but you do not receive the money until you redeem the bond. The interest compounds — meaning you earn interest on your interest — and the total value grows over time. When you check your TreasuryDirect account, you see the current value of each bond, which includes all accrued interest to date.

You owe federal income tax on the interest when you redeem the bond, not when it accrues. You do not owe state or local income tax on savings bond interest. If you hold the bond for decades, you will owe tax on all the accumulated interest in the year you cash it in, which can push you into a higher tax bracket that year.

Some people use savings bonds for education expenses and may be able to exclude the interest from taxable income under the Education Savings Bond Program, but this has income limits and other conditions. Talk to a tax professional if you are considering this strategy.

Redeeming your bonds

You redeem bonds through your TreasuryDirect account by requesting a transfer to your linked bank account. The money usually arrives within a few business days. You can redeem a bond anytime after you have held it for one year.

If you redeem a bond within five years of purchase, you lose the last three months of interest as a penalty. For example, if you buy a bond in March and redeem it in July of the same year, you receive the interest through April only. After five years, there is no penalty, and you receive all accrued interest.

You cannot partially redeem a bond — you redeem the entire bond or none of it. If you need only part of the money, you would have to redeem the whole bond and reinvest the remainder elsewhere.

What happens if you lose access to your account

If you forget your TreasuryDirect password, you can reset it through the website using your email address and security questions. If you lose access to your email account, contact TreasuryDirect customer service at 844-284-2676 (toll-free) or through the website's contact form.

If you die, your bonds become part of your estate. The person managing your estate (executor or administrator) can contact TreasuryDirect to transfer the bonds or redeem them. Bonds do not pass directly to a beneficiary the way some financial accounts do — they go through the probate process unless you have set up your estate to avoid it.

Frequently Asked Questions

Can I buy savings bonds for someone else?

No. You can only buy bonds in your own name using your Social Security number. You cannot buy bonds as a gift for another person through TreasuryDirect. However, you can give someone money and they can buy bonds themselves, or you can buy paper Series I or EE bonds with your tax refund and give those to someone else.

What if I need my money before one year?

You cannot redeem a savings bond before one year has passed. If you need access to money sooner, savings bonds are not the right tool — consider a high-yield savings account or money market account instead. After one year, you can redeem anytime, but you will lose three months of interest if you redeem within five years.

Do I have to report my savings bonds on my taxes every year?

No. You report the interest only in the year you redeem the bond. If you hold a bond for 20 years and then cash it in, you report all 20 years of interest on that year's tax return. You can choose to report interest annually instead, but most people do not because it creates a tax bill every year.

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

No. Savings bonds cannot be held inside an IRA, 401(k), or other retirement account. You can only buy them in a regular TreasuryDirect account in your own name. If you want to hold Treasury securities in a retirement account, you would need to buy Treasury bills, notes, or bonds through a brokerage account instead.