You can buy Series EE and Series I savings bonds for grandchildren directly from the U.S. Treasury through TreasuryDirect, or through a bank or broker

The most direct route is TreasuryDirect (treasurydirect.gov), the U.S. Treasury's online platform. You create an account, link a bank account, and buy bonds in your own name but designate the grandchild as the owner or beneficiary. You fund the purchase with an electronic transfer from your checking or savings account. There are no fees.

If you prefer to work with a financial institution, you can buy savings bonds through most banks and brokers, though availability and minimum purchase amounts vary by institution. Some banks no longer offer this service, so call ahead. You will pay a small transaction fee — typically $5 to $25 — on top of the bond cost.

A third option is to give money to the grandchild's parent or guardian and have them buy the bonds in the child's name through TreasuryDirect. This is simpler if you want the bond registered directly to the grandchild from the start, though it requires coordination with another adult.

Key Takeaways

  • TreasuryDirect is the cheapest way to buy savings bonds for grandchildren and requires only an online account linked to your bank account.
  • You can buy bonds in your name with the grandchild as beneficiary, or coordinate with the child's parent to register the bond in the grandchild's name from the beginning.
  • Series EE bonds are sold at face value and earn a fixed rate; Series I bonds adjust for inflation and have a variable rate component that changes every six months.
  • Bonds purchased through a bank or broker cost more due to transaction fees but may be easier if you prefer in-person service.
  • Savings bonds cannot be sold or transferred once purchased, so the registration method you choose at purchase is permanent.

Setting up a TreasuryDirect account to buy bonds

Go to treasurydirect.gov and select "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 verify your identity using information from your credit file — this is not a credit check and does not affect your credit score.

Once your account is open, you can buy bonds immediately. You do not need to wait for a confirmation letter or approval from the Treasury. The account is yours to use for future purchases as well, so you can buy bonds for multiple grandchildren or add to existing holdings without reopening.

Registering the bond in your name versus the grandchild's name

When you buy through TreasuryDirect, you choose how the bond is registered. The most common choice for grandparents is to register it in your own name with the grandchild listed as beneficiary. If you die, the bond passes to the grandchild without going through probate. The grandchild cannot access or cash the bond while you are alive.

The alternative is to have the bond registered in the grandchild's name from the start. This requires the child's Social Security number and typically involves the parent or guardian setting up the TreasuryDirect account. The grandchild owns the bond outright, though a minor cannot cash it without a parent or guardian's signature. If you want the bond to be a true gift with no strings attached, this method is clearer.

A third option, less common but available, is to register the bond in both your name and the grandchild's name as co-owners. Either of you can then cash it. This is rarely used for grandparent-to-grandchild gifts because it gives the child access before you intend.

Buying bonds through a bank or broker

Call your bank or brokerage firm and ask whether they sell savings bonds. Many large banks (Bank of America, Wells Fargo, Chase) still offer this service, but some regional and online banks do not. If they do, ask about their transaction fee, minimum purchase amount, and how long the purchase takes to settle.

The process is similar to buying through TreasuryDirect: you provide the grandchild's information, choose Series EE or Series I, and fund the purchase. The bank or broker handles the registration with the Treasury on your behalf. You will receive a confirmation and a bond statement, though you will not receive a physical bond certificate — all savings bonds are now held electronically.

The main advantage of buying through a bank is convenience if you already have a relationship there and prefer to handle it in person or by phone. The main disadvantage is cost: the transaction fee can be $5 to $25 per bond purchase, which is a meaningful percentage of a small gift.

Choosing between Series EE and Series I bonds for a grandchild

Series EE bonds are sold at half their face value — you pay $50 for a $100 bond — and earn a fixed interest rate set by the Treasury. The rate is the same for all buyers and does not change over the life of the bond. Series EE bonds are may provide to double in value in 20 years, even if the fixed rate is very low. They earn interest for up to 30 years.

Series I bonds are sold at face value — you pay $100 for a $100 bond — and earn interest made up of two parts: a fixed rate and an inflation rate that adjusts every six months based on the Consumer Price Index. The combined rate changes twice a year. Series I bonds are better protection against inflation but offer less certainty about the total return. They also earn interest for up to 30 years.

For a long-term gift to a grandchild, Series I bonds are often the better choice because inflation erodes the purchasing power of a fixed-rate return over decades. However, if you want simplicity and the may provide that the bond will at least double, Series EE is straightforward. You can also split your gift and buy both types.

Timing and minimum purchase amounts

The Treasury sells savings bonds on the first business day of each month. If you buy through TreasuryDirect, your purchase is processed on that date, and interest begins accruing immediately. If you buy through a bank or broker, the timing depends on when they submit your order to the Treasury, which may be a few days after you make the purchase.

The minimum purchase through TreasuryDirect is $25 for Series EE bonds and $25 for Series I bonds. You can buy in any amount above that in $1 increments (so $26, $27, $50, $100, and so on). Banks and brokers may have higher minimums — some require $100 or $500 per purchase — so ask before you commit.

There is an annual purchase limit: you can buy up to $10,000 in Series EE bonds and up to $10,000 in Series I bonds per person per calendar year through TreasuryDirect. If you buy through a bank or broker, the limit is typically $5,000 per bond type per year, though this varies. These limits apply to bonds you buy for yourself; bonds you buy for a grandchild count against your limit, not theirs.

What happens when the grandchild reaches adulthood

If the bond is registered in your name with the grandchild as beneficiary, the grandchild receives it when you die. At that point, they own it and can hold it, cash it, or transfer it to their own TreasuryDirect account. They will owe federal income tax on the interest earned, but not state or local tax.

If the bond is registered in the grandchild's name from the start, they own it immediately. When they turn 18, they can manage it themselves through TreasuryDirect if they choose. Before that, a parent or guardian must handle any transactions. The grandchild will owe federal income tax on the interest when the bond is cashed, regardless of their age at that time.

Savings bonds cannot be cashed before one year after purchase. If cashed before five years, there is a penalty of the last three months of interest. After five years, there is no penalty. This structure encourages long-term holding, which is why savings bonds are often given as gifts for education or major life events rather than as spending money.

Frequently Asked Questions

Can I buy a savings bond as a gift and give it to my grandchild right away?

Yes, but the method depends on how you register it. If you register it in the grandchild's name, they own it immediately and you can give them the bond statement. If you register it in your name with them as beneficiary, they cannot access it until you die. For a gift you want them to have now, register it in their name.

What if my grandchild is under 18 — can they own a savings bond?

Yes. A minor can own a savings bond registered in their name. A parent or guardian must sign any paperwork or cashing requests until the child turns 18. The bond earns interest the same way regardless of the owner's age.

Do I have to use TreasuryDirect, or can I buy bonds anywhere?

TreasuryDirect is the official source and has no fees, so it is the cheapest option. Banks and brokers also sell savings bonds but charge transaction fees. You can use whichever is most convenient, but TreasuryDirect is the better financial choice for most grandparents.

Can I change my mind and cash the bond if I need the money back?

Yes, but with limits. Bonds must be held for at least one year. If cashed before five years, you lose the last three months of interest. After five years, you can cash without penalty. Once cashed, the bond is gone — you cannot buy it back.

What tax form do I get when the bond is cashed?

The person who cashes the bond receives a Form 1099-INT reporting the interest earned. If the bond is in your name, you get the form and owe the tax. If it is in the grandchild's name, they get the form. The interest is subject to federal income tax but not state or local tax.