Giving Savings Bonds as a Gift has Become a Ridiculously Complicated Process

give savings bonds as a giftLeave it to government to make a simple, easy process like buying savings bonds as a gift, complicated, cumbersome and time consuming for both you and the recipient. The process of walking into a bank and walking out with a savings bond is over as 2012. You will now need to purchase them online. Unless you’re planning on giving savings bonds on multiple occasions to the same person, you may not find the effort worthwhile.
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Before you buy a savings bonds as a gift, you should know the following:

  1. Both, you and the recipient (or parent of recipient) are going need to set-up online Treasury Direct Accounts.
  2. You are going to have to ask the recipient or their parent for their social security number and their Treasury Direct Account number. (Unless, you’re a close relative asking for a social security number might be a little uncomfortable.)

Assuming that the requirements above don’t prevent you from proceeding, here is the process. You may also want to watch the following video from Treasury Direct on gifting savings bonds.

Step 1) Set-up a Treasury Direct Account. You will need your bank account and number, as well as your SSN# to set-up an account.

Step 2) Once you set-up an account. You need to use the “Buy Direct” button on the top navigation. You cannot use the “Purchase Express” function for gifts

Step 3) Select the type of savings bond you want to purchase. We recommend that you select EE bonds for children. Learn about the differences between EE and I Savings Bonds here.

Step 4) After selecting the type of bond, you will need to add the name of the recipient of the bond. Click on “Add New Registration”. You will need enter the recipient’s full legal name and social security number. On this page, please make sure to check “This is a gift.”

Step 5) Decide on the amount. The minimum is $25.00 and maximum is $10,000. Any amount in between in one cent increments is available. There are few self-explanatory steps to follow after this to purchase the savings bonds.

Step 6) Please note, you will not see the bonds that you purchased in your account until one business day after that transaction. You will not be able to “send the bonds” to recipient until 5 days after your purchase has been made, as the treasury waits for the funds to arrive from your bond. At that point, you will be able to click on the “gift box” tab in the navigation and see the bond you purchased.

Step 7) To send the bond to the recipient, which means having the bond move from your online account to theirs, you will need click on the bond in the gift box and input THE RECIPIENT’s Treasury Direct Account Number.

Step 8) What if you want the recipient or their parents to know that you purchased a savings bond for them. The Treasury does make available several cheesy “gift certificate” templates that you can print out and fill in. While they are called gift certificates, they have no economic value or legal status.

Do you have savings bonds that you received as a gift? Find Out How Much They Are Worth

This lesson is part of our Free Guide to Buying Savings Bonds.  Continue to the next lesson here.
  Want to learn how to generate more income from your portfolio so you can live better?  Get our free guide to income investing here.

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Comments

  1. douglas polsky says

    i received a gifted u.s. savings bond , from a person .whos social security is on it . but who now is deceised. do i have to pay taxes when i cash it in ?

    • David Waring says

      Hi Douglas thanks for the comment. The short answer is yes you will have to pay taxes however the situation may be a little more complicated here as it sounds like your name is not on the bonds. If that is the case then you will have to prove that you inherited the bond from their deceased owner when he died as you cannot cash in a savings bond that does not have your name on it. You can find more on that here: http://www.treasurydirect.gov/indiv/research/indepth/ebonds/res_e_bonds_eedeath.htm Hope that helps. Best Regards, Dave

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