Are Savings Bonds Still a Thing?

Do people still give savings bonds to children and hope the investment will be worth something in the future?

Here is one of my stronger memories from Early Childhood: it’s a day or two after Christmas, and my mom and little sister and I are in a car with my grandmother. We’d be in Fresno, having just made the 14-hour drive from Portland, Oregon, where we just finished spending Christmas #1 with our grandparents on my dad’s side.

This might have been the year where my grandma on my mom’s side gave me a Strawberry Shortcake doll. It was definitely the year where my grandparents on my dad’s side gave me a $50 savings bond.

So I was all “Mommmmmmm we should get McDonald’s!” because I was a child and we were in a car and no doubt we were passing more than one of those giant yellow Ms, as vivid as streetlights, and Mom said something about how we couldn’t do that, or that we didn’t have money for that, and I said that I would pay for it with my newly-acquired $50.

That was how I learned that you couldn’t actually do anything with savings bonds. You had to put them in a cardboard box in the attic and leave them there for twenty years.

When I was in grad school I redeemed my small collection of savings bonds, because I had very little money and figured it was as good a time as any. I was crushed to learn that, in all this time, they had only accumulated a few hundred dollars’ value. Why had everyone made such a big deal out of these things?

So, when Billfolder LauraSmash asked yesterday if people still gave savings bonds to children or whether we were all committed to 529 plans now, I decided to do some research.

Would You Want Me to Give Your Child a 529 Plan Gift Card?

First of all, yes, savings bonds still exist. However, they no longer exist in paper form—which is probably good for people who might forget that they put their paper savings bonds in a cardboard box in the attic, but probably less good for people who might forget that they once made an account at TreasuryDirect.gov.

Buying Savings Bonds Online | Ready.Save.Grow.

You can also give savings bonds as gifts, but the recipient must also have a TreasuryDirect.gov account.

Individual – Savings Bonds As Gifts

To give an electronic savings bond, you must know the recipient’s:

Full name

Social Security Number (SSN) and/or taxpayer ID number

TreasuryDirect account number

When the bond is delivered to the recipient’s TreasuryDirect account, he or she will get an e-mail announcing your gift.

You must be 18 or older to create a TreasuryDirect account and to buy gift bonds. A child under 18 can get gift deliveries in a Minor linked account which is established within the TreasuryDirect account of the parent or guardian.

If you’d like the child to have something to unwrap, instead of simply informing them that you’ve made a gift on their behalf into a minor linked account that is only accessible online, TreasuryDirect also offers free printable certificates. (Because there’s nothing a kid wants more than a piece of paper with a balloon printed on it.)

TreasuryDirect also includes a growth calculator to help you predict how much your gift might be worth, if the child and/or parents remember it exists twenty years from now. (As TreasuryDirect puts it: “Retrieving a lost or forgotten account number requires a rigorous process for verifying a customer’s identity.”)

Interest on savings bonds isn’t great right now—Series I bonds only earn 2.76 percent interest, although that rate is going to change in April 2017—and according to the TreasuryDirect growth calculator, a $50 savings bond that grows at 3 percent interest (the calculator only allows whole numbers) over twenty years will be worth $79.30 after taxes.

So yes, savings bonds are still a thing, and it is still possible to give savings bonds to children!

Should you, though? I mean, should you?

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