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How to Purchase Savings Bonds

By Edited Nov 13, 2013 0 0

When you purchase Series I savings bonds, you are purchasing a low risk asset for your investment portfolio. With both a fixed rate to ensure you make a profit, and a six month variable rate to protect your money against inflation and deflation, I Bonds make a good addition to any investment mix. These also make great gifts for children, grandchildren, neices and nephews.

Things You Will Need

The internet

An Account with Treasury Direct

A minimum $25

Social Security Number

US Citizenship

Step 1

Bonds were once only available for purchase and redemption in paper form, and you had to visit a banking institution to make transactions with them. Now the entire process is online (and will only be available online in the near future). While you can still purchase paper bonds at most credit unions and banking institutions, I highly advise you to go electronic.

Step 2

Sign onto Treasury Direct and open an account. You will need your driver's license, bank account number and bank routing number, social security and an email address. Once you are finished, an access card will be mailed to your home in order to verify your identity. You will need this access card to access your account for the first time.

Step 3

You can set up automatic savings bond purchases through your employer. Log into your account and go to Manage Direct. Then click on the "View My Funding Options" tab. There you will find instructions for submitting paperwork to your employer for automatic paycheck withdrawals.

Step 4

You can also automatically purchase savings bonds through your tax return. If you want to use your entire tax return to purchase savings bonds, and the amount is between $50 and $5,000, then check this option right on your tax return form. If, however, you need to split your tax return between accounts (say a checking account and a savings bond purchase), then you will need to fill out Form 8888.
Savings Bonds used to be a hassle to purchase because they were only in paper form. If you lost them or if they were stolen, you had to send away for replaced ones. Now through Treasury Direct, all of your savings bonds transactions can be made online and automated to help you save more money. If not for you, then open an account for your child or grandchild and watch their savings grow!

Tips & Warnings

Do you all ready own paper bonds? If you would like to go all electronic but still have some paper bonds, you can convert the paper bonds into electronic bonds using SmartExchange.


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