How to buy Paper Savings Bonds From the Federal Reserve Bank
U.S. savings bonds are still one of the most stable forms of investment and return a higher interest rate than a typical savings account. Backed by the U.S. government, savings bonds are a safe investment and aren't subject to the fluctuations of the stock market. Paper savings bonds are issued by a branch of the Federal Reserve Bank, and there are a limited number of ways to purchase them.
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Instructions
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Before purchasing U.S. savings bonds, it's important to understand the difference between EE bonds and I bonds. EE bonds have been offered by the U.S. Treasury since 1980. The cost for an EE bond is one-half its face value, meaning a $100 bond will cost $50. EE bonds reach their full value approximately 17 years after their purchase date. The other type of savings bond is the I bond, which has been available since 1998. These bonds were designed to protect the investor from inflation. When I bonds are purchased, a fixed interest rate is set and stays in effect for the life of the bond. I savings bonds are purchased at their full face value.
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You can purchase series I or series EE savings bonds at most banks and credit unions. Smaller branches may not sell bonds, so you should check by phone to find an institution in your area that sells them. You can't pay for the bonds with a check from a different bank, so either buy the bonds from your own bank or be prepared to pay in cash or with a cashier's check. You'll need your Social Security number to purchase U.S. savings bonds, since it will be used to track the ownership of the bonds.
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You'll be given an order form for either series I or series EE savings bonds. After you fill out the order form and make your payment, the bank or credit union will send the order form and payment to a Federal Reserve Bank. The bonds will be issued in paper form and mailed to you within 15 business days. The issue date on the savings bonds will reflect the date of purchase. This ensures that interest begins to accrue as soon as you pay for the bonds.
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If your place of employment supports the Payroll Savings Plan, you can sign up to purchase U.S. savings bonds through automatic payroll deductions. Your employer will submit payment for the bonds to the Federal Reserve, and the paper savings bonds will be issued in your name and mailed to your home.
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Tips & Warnings
The principal and interest associated with a savings bond cannot be lost. Savings bonds can be replaced if stolen, lost or destroyed. There is a limit of $5,000 in paper bonds than can be purchased annually per Social Security number.
