Where to buy savings bonds

You can buy U.S. savings bonds directly from the U.S. Department of the Treasury through TreasuryDirect, which is the official online platform. This is the only place to purchase new bonds from the government. You cannot buy them from a bank, broker, or financial advisor — those institutions can only sell you bonds that were issued before May 2003, and those are no longer being produced.

TreasuryDirect is free to use. You create an account, link a bank account, and purchase bonds electronically. The bonds are held in digital form only — there are no paper certificates issued anymore. All transactions, statements, and redemptions happen through your TreasuryDirect account.

Key Takeaways

  • You buy savings bonds through TreasuryDirect.gov, the official Treasury website, by creating a free account and linking your bank account.
  • Series EE bonds and Series I bonds are the two types currently sold; Series I bonds protect against inflation while Series EE bonds earn a fixed rate.
  • You must hold a savings bond for at least one year before you can cash it in, and you lose the last three months of interest if you redeem it before five years.
  • The minimum purchase is $25 per bond, and you can buy up to $10,000 in electronic bonds per calendar year through TreasuryDirect.

Setting up your TreasuryDirect account

Go to TreasuryDirect.gov and click "Open an Account." You will need a Social Security number, a valid email address, and a U.S. bank account (checking or savings). 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. The Treasury will make two small test deposits to your bank account — usually within one to two business days — and you will need to confirm the amounts in your TreasuryDirect account to verify ownership. This step protects your account from unauthorized access.

Choosing between Series EE and Series I bonds

Series EE bonds earn a fixed interest rate set by the Treasury every six months. The rate applies to all bonds purchased during that six-month period. Your earnings are may provide not to change, which makes these bonds predictable if you know what rate you are locking in.

Series I bonds earn a combined rate made up of a fixed portion plus an inflation component that changes every six months based on the Consumer Price Index. If inflation rises, your earnings rise with it. If inflation falls, your earnings fall but the fixed portion keeps you from earning zero. Series I bonds are useful if you want protection against rising prices eating into your savings.

Both types earn interest monthly, though you do not see the money until you redeem the bond. The interest compounds semiannually, meaning you earn interest on your interest.

Making your purchase

Log into your TreasuryDirect account and select "Buy Securities." Choose the bond type (Series EE or Series I), then enter the amount. The minimum is $25 per bond, and you can buy in $1 increments above that. You can purchase up to $10,000 in electronic bonds per calendar year through TreasuryDirect.

If you want to buy more than $10,000 in a single year, you can purchase up to an additional $5,000 in Series EE bonds using your federal tax refund. This requires a separate transaction through TreasuryDirect during tax season, and you must have filed your return electronically.

Review your order, confirm the bank account the money will be drawn from, and submit. The Treasury will debit your bank account within one to two business days. Your bond appears in your account immediately, though the purchase is not final until the funds clear.

Understanding the holding period and penalties

You must hold a savings bond for at least one year before you can redeem it. If you try to cash it in before that year is up, the Treasury will reject the request.

If you redeem the bond between one and five years of purchase, you lose the last three months of interest. For example, if you redeem after two years, you receive interest only through month 21, not month 24. After five years, there is no penalty — you receive all interest earned.

This penalty structure is built into the bond itself. It is not a fee charged by TreasuryDirect; it is how the Treasury calculates your payout. Plan your purchase with this timeline in mind if you think you might need the money sooner.

Redeeming your bond

Log into TreasuryDirect, select the bond you want to redeem, and request the redemption. The Treasury deposits the money into your linked bank account within one to two business days. You can redeem bonds at any time after the one-year holding period, even if you are in the middle of a six-month interest period.

When you redeem, you receive the original purchase price plus all accrued interest, minus the three-month penalty if you are redeeming before five years. The interest is subject to federal income tax in the year you redeem, though it is not subject to state or local income tax.

Tax reporting and record-keeping

The interest you earn on savings bonds is subject to federal income tax. You do not pay tax each year the bond earns interest — you pay tax only in the year you redeem the bond. This is called accrual taxation, and it is one reason savings bonds work well for long-term savings.

TreasuryDirect sends you a 1099-INT form each January for any bonds you redeemed in the previous year. Keep records of your purchase dates and redemption dates in case you need them for tax purposes. If you inherit a savings bond, the tax rules are different; consult a tax professional about your specific situation.

Frequently Asked Questions

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

You can purchase a bond in your own TreasuryDirect account and then transfer it to another person's account, but the process requires both accounts to exist first. The recipient must set up their own TreasuryDirect account, and you initiate the transfer through your account. The recipient must accept the transfer for it to complete.

What happens if I forget my TreasuryDirect password?

Click "Forgot Username or Password" on the TreasuryDirect login page. You will be asked to verify your identity using security questions. If you cannot answer those questions, you can request identity verification by mail, which takes longer. Keep your login information in a safe place to avoid this delay.

Can I change my mind after I buy a bond?

No. Once you purchase a bond through TreasuryDirect, the transaction is final. You cannot cancel it or get your money back. You must wait at least one year before you can redeem it, and if you redeem before five years, you lose three months of interest. Plan your purchase carefully before submitting your order.

Do I need to report my savings bonds to the IRS every year?

No. You report the interest only in the year you redeem the bond, when the Treasury sends you a 1099-INT form. You do not file anything with the IRS while the bond is earning interest. This tax deferral is one advantage of savings bonds for long-term savers.