How to Purchase a Savings Bond

Since the U.S. government backs savings bonds, they are among the safest long-term investments - and make great gifts for kids.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Savings Bonds

1. Find out whether your local bank provides savings bonds. If it doesn't, ask your banker to refer you to another source.
2. Meet with an officer at a bank that does sell bonds.
3. Decide how much money you wish to spend.
4. Determine your purpose in buying a savings bond. Nowadays, they are usually given as gifts to infants and children on birthdays and other important occasions.
5. Know the full name and, if possible, the Social Security number of the person who will receive the bond.
6. Complete the necessary paperwork.
7. Arrange for payment, either by withdrawing the money from your account, writing a check or paying cash.
8. Give the savings bond in person.

Tips & Warnings

• Savings bonds come in various face values, usually multiples of $25. They're generally sold at half the face value and yield the face value at maturity. They must be held for at least six months before redemption, but can be redeemed at any time after that.
• If you own savings bonds that have matured, you can donate them to a nonprofit institution and take a tax deduction for the face value of the bonds.
• You may forget that you own bonds that will mature many years from now, so keep careful records of your purchases. Often, bonds do not continue to bear interest beyond their maturity dates.