Where Can I Buy Savings Bonds? A Practical Guide

Savings bonds offer a low-risk way to grow your money over time, backed by the full faith and credit of the U.S. government. This article provides you with a step-by-step on where and how to buy savings bonds and some additional insights.

The primary and most convenient place to purchase savings bonds is online through TreasuryDirect.gov. It’s the official website of the U.S. Department of the Treasury, and it’s designed specifically for individuals to buy and manage Treasury securities, including savings bonds.

TreasuryDirect: Your Online Portal

TreasuryDirect is your one-stop shop. This eliminates the need to go through a bank or other financial institution. You can purchase both Series EE and Series I savings bonds directly.


Here’s a quick breakdown:

• Series EE Bonds: These earn a fixed interest rate for up to 30 years.
• Series I Bonds: These earn a composite rate that combines a fixed rate and an inflation rate, protecting your investment’s purchasing power.

How to Buy Savings Bonds on TreasuryDirect: A Step-by-Step

1. Create an Account: Go to TreasuryDirect.gov and click “Open an Account.” You’ll need to provide your Social Security number, address, and bank account information.
2. Choose an Account Type: Select “Individual” unless you’re buying bonds for a business or other entity.
3. Fund Your Account: You’ll need to link your bank account to your TreasuryDirect account. This allows you to electronically transfer funds to purchase bonds.
4. Purchase Bonds: Navigate to the “BuyDirect” page, select the type of savings bond you want (EE or I), enter the amount, and confirm your purchase. You can buy bonds in electronic form, starting with as little as $25.
5. Consider Setting up Regular Purchases: Automation can help you consistently invest in savings bonds without having to manually initiate the process each time.

Why TreasuryDirect is the Best Option

TreasuryDirect offers several advantages:

• Direct Purchase: You avoid any fees or commissions that might be charged by intermediaries.
• Convenience: You can buy bonds 24/7 from the comfort of your own home.
• Security: Your bonds are held in electronic form, eliminating the risk of loss or theft associated with paper bonds.

For many years, savings bonds were commonly purchased in paper form at banks and other financial institutions. However, this is no longer the case.

Why Banks No Longer Sell Paper Savings Bonds

In 2012, the Treasury Department stopped selling paper savings bonds at financial institutions. This decision was driven by a desire to:

• Reduce Costs: Electronic transactions are significantly cheaper to process than paper transactions.
• Increase Efficiency: TreasuryDirect provides a more streamlined and efficient way to manage savings bonds.
• Promote Security: Electronic bonds are less susceptible to fraud and theft.

What to Do if You Have Paper Savings Bonds

If you still have paper savings bonds, they are still valid and will continue to earn interest until they reach their final maturity date. You can:

• Hold them: Continue to hold them until they mature.
• Redeem them: You can redeem them at most banks and credit unions, although you may need to be a customer of the institution.
• Convert them to Electronic Bonds: You can convert eligible paper savings bonds to electronic form through TreasuryDirect. This requires creating a TreasuryDirect account and following the instructions for converting paper bonds.

Choosing between Series EE and Series I bonds depends on your investment goals and risk tolerance.

Series EE Bonds: Fixed Interest and Predictability

Series EE bonds earn a fixed interest rate that is set at the time of purchase. The interest is compounded semi-annually, and the bonds double in value after 20 years (guaranteed by the Treasury).

• Pros: Predictable returns, guaranteed doubling in value, low risk.
• Cons: The fixed interest rate may not keep pace with inflation, especially in high-inflation environments.

Series I Bonds: Inflation Protection

Series I bonds earn a composite rate that combines a fixed rate and an inflation rate. The inflation rate is based on the Consumer Price Index for all Urban Consumers (CPI-U).

• Pros: Protection against inflation, low risk, can be a good hedge against rising prices.
• Cons: The interest rate can fluctuate, and the fixed rate component may be low.

Choosing the Right Bond for You

Consider these factors when deciding which type of bond to buy:

• Investment Horizon: If you have a long-term investment horizon (20+ years), Series EE bonds may be attractive due to their guaranteed doubling in value.
• Inflation Expectations: If you expect inflation to rise, Series I bonds may be a better choice.
• Risk Tolerance: Both types of bonds are low-risk, but Series I bonds offer better protection against inflation risk.

I’ve personally used savings bonds as a part of a long-term savings strategy, particularly for education savings. One crucial thing I learned is the importance of understanding the tax implications.

Tax Advantages and Considerations

• Federal Taxes: Interest earned on savings bonds is subject to federal income tax but is exempt from state and local taxes.
• Education Tax Benefits: If you use savings bonds to pay for qualified higher education expenses, you may be able to exclude the interest from your income. There are specific requirements and income limitations.
• Timing of Redemption: The timing of when you redeem your bonds can affect your tax liability. Consider redeeming bonds in a year when your income is lower.

Unexpected Benefits of TreasuryDirect

While TreasuryDirect is straightforward, there are a couple of nuances I discovered:

• Gift Giving: TreasuryDirect allows you to gift electronic savings bonds to others, making it a convenient and thoughtful gift option.
• Account Management: Setting up beneficiaries on your account is a must. This ensures that your savings bonds are transferred according to your wishes in the event of your death.

Mistakes to Avoid

One common mistake is redeeming bonds too early. Series EE and I bonds earn interest for up to 30 years, but if you redeem them within the first five years, you’ll forfeit the last three months of interest. Patience is key to maximizing your returns.

While this article focuses on savings bonds, TreasuryDirect also offers other Treasury securities that may be of interest.

Treasury Bills, Notes, and Bonds

• Treasury Bills: Short-term securities that mature in a year or less.
• Treasury Notes: Intermediate-term securities that mature in two, three, five, seven, or ten years.
• Treasury Bonds: Long-term securities that mature in 20 or 30 years.

These securities are typically sold at auction, and the interest rates are determined by market forces. They can be a good option for investors looking for higher yields than savings bonds, but they also carry more risk.

TIPS (Treasury Inflation-Protected Securities)

TIPS are designed to protect investors from inflation. The principal of a TIPS increases with inflation and decreases with deflation, as measured by the CPI. When the TIPS matures, you are paid the adjusted principal or the original principal, whichever is greater. TIPS can be a good addition to a diversified portfolio.

In summary, your primary and most convenient option for purchasing savings bonds is TreasuryDirect.gov. The era of buying paper savings bonds at banks is largely over. Understand the differences between Series EE and Series I bonds to make an informed decision based on your financial goals and risk tolerance. Always consider the tax implications and avoid redeeming bonds too early.

As a financial content creator, my goal is to provide clear, actionable, and reliable information to help you make informed decisions about your finances. I draw upon my years of experience in financial planning and investment analysis to deliver content that is both informative and engaging. I am committed to providing information that is accurate, up-to-date, and free of bias.


Where can I buy savings bonds? Always on TreasuryDirect.

Here are some frequently asked questions about buying savings bonds:

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