Personal Finance

Help in Buying Digital Savings Bonds

Ann Carrns
Key Points

What you need to go Savings Bond digital: 

Your Social Security Number

Recipient's Social Security Number

Treasury Direct Account

U.S. Savings Bonds

At this time of year, some people like to buy savings bonds for their grandchildren, nieces and nephews who are graduating from high school or college, or getting married.

As of last January, though, you can no longer buy paper savings bonds to give as gifts.

Rather, you have to buy electronic versions, using a Treasury Direct account with the federal government. The government moved to eliminate paper bonds as a cost-saving measure. But the electronic bonds also do away with the problem of keeping track of the paper and allow you to easily check the bond’s current value online.

To help people navigate the new — for some — world of digital savings bonds, the Treasury Department has produced an online video, as well as a detailed online demonstration with step-by-step instructions, to walk purchasers through the process of buying the electronic version.

I took a quick look at the video, which is a bit promotional while outlining the basics. The demonstration offers more details, as do the step-by-step instructions. If you’re a newbie to digital savings bonds, the tools will help.

If you’re a paper bond stalwart, however, the new system may take some getting used to, even with the online tools. It’s true that online bond buying means you can purchase them “24/7 from the comfort of your living room,” as the video says. But using the demonstration, which goes one step at at at time through the process, seemed to drive home that buying bonds online is, in some respects, a more involved process than going to the branch of a bank and paying cash for a paper bond. (Generally, bonds were mailed to the buyer a few weeks later, under the old system.)

You can, for instance, buy electronic bonds quickly, assuming you have already established a Treasury Direct account and you have the recipient’s Social Security number. (The demonstration says this is so the purchase counts toward the recipient’s annual bond purchase limit — generally, $10,000 each for Series EE and Series I bonds — rather than your own total.) But the intended recipient must have a Treasury Direct account, too, to take ownership of them. (If the recipient is under 18 years old, his or her parent or guardian has to set up a linked account to accept the digital bonds.) You can keep the bonds in an electronic “gift box” until the recipient’s account is established.

Previously, you could use your own Social Security number when buying paper bonds, if you didn’t know the recipient’s number. The recipient would later provide it, when redeeming the bond, according to the Treasury Department.

If you still want to give something tangible to the recipient, you can download and print paper gift certificates, decorated to reflect occasions like birthdays, graduations etc., to tuck into a card.