The new way to buy savings bonds


The current 2.2 percent rate on Series I savings bonds may be tempting, but buying the bonds has become more complicated, according to Consumer Reports. You can no longer buy paper Series I and EE savings bonds — those convenient envelope-stuffer gifts — at banks and credit unions. Rather, you must buy electronic bonds through the Treasury Department’s Web-based system, TreasuryDirect.

In buying a savings bond for her young nephew, CR’s reporter learned that the process can be clunky. Here’s help:

First, go to treasurydirect.gov, find the section labeled “Open an Account,” then click on “TreasuryDirect.” Have on hand your Social Security or taxpayer identification number (and the recipient’s, if it’s a gift), the savings or checking account number from which you’ll be making purchases, and the institution’s routing number. To open an account for a child, the parent or guardian must first set up his or her own account, then the child’s account. The accounts are linked, and the parent has control until the child turns 18.

Once you receive your account number and enter it, TreasuryDirect will send you an email with a one-time passcode — different from the account password — to access the account. Registering your computer eliminates the need for a passcode each time you log in.

You choose your security settings, then add a “registration,” or owner. Choose “sole owner” if one person — you or a gift recipient — will own the bond. Choose “primary owner” if two people will own the bond (the site lets you designate a second co-registrant). Choose “beneficiary” only to designate who gets the bond when you die. Next, TreasuryDirect takes you to a new page, where you choose the owner’s name from the “Add New Registration” drop-down menu.

If you’re buying for someone who doesn’t yet have a TreasuryDirect account, you can still buy the bond by clicking “This is a Gift” during purchase. Until you transfer the bond to the recipient, it will be stored in a virtual gift box.

Series I and EE savings bonds have a fixed rate of return. New EE bonds’ current rate is 0.6 percent. Series I bonds also have a variable, semiannual inflation rate that is adjusted in May and November. You can buy electronic bonds in any denomination between $25 and $10,000, down to the penny. They’re bought at face value: a $50 bond costs $50. Interest begins to accrue at the point of purchase.

To get a piece of paper to hand the recipient, print out a gift certificate in one of several designs offered on the TreasuryDirect site.

For a demonstration, go to treasurydirect.gov/indiv/planning/plan_giftsdemo.htm.

2012, Consumers Union Inc.

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