If you’re looking for a way to diversify your savings, purchasing a savings bond provides a safe, risk-free way to grow your money. Government-issued bonds have a fixed interest rate and earn interest for a period of no less than 20 years. Available in small or large denominations, savings bonds are easily accessible and make the perfect gift. Perhaps you’ve considered buying bonds for yourself or giving a bond as a gift. But if this is your first experience with bonds, you may question where to get savings bonds.
Where to Get Savings Bonds?
Most people immediately think of a bank when they’re ready to purchase a savings bond. This is understandable given the fact that banks offer savings accounts and a variety of investment accounts. However, recent changes have shifted the way people purchase savings bonds. In the past, you could walk into any bank or brokerage firm and purchase a bond. As of January 2012, paper bonds are no longer sold at banks and other financial institutions. Digital or electronic savings bonds have replaced paper certificates, and these digital bonds are available for purchase only through the United States Department of Treasury. Why the switch?
This is the age of convenience, with everything from banking to shopping being completed online. Some people choose their banks based on its electronic features, and if given the option to switch to paperless statements, many jump at the opportunity. The elimination of paper bonds meets the ever-changing needs of consumers and provides an easier way to manage their savings. You can purchase bonds online, redeem them online, and since they’re electronic, you can never lose a bond.
How to Get a Savings Bond
Knowing where to get savings bonds can start or add to your personal savings. To get started, you will need to set up an account with Treasury Direct. Visit TreasuryDirect.gov and select the option to open an account. Creating an account is simple and fast, and you only need a Social Security number, your address, your bank account number and a bank routing number.
You can also give an electronic bond as a gift. However, you will need the full name and Social Security number of the recipient, plus this person needs to have his own TreasuryDirect account to receive your gift. Persons under the age of 18 cannot create their own TreasuryDirect account. Parents have to set up a custodial account for minor children.
What to Do with Paper Bonds?
Although paper bonds are no longer issued, previously sold certificates do maintain their value. Banks and credit unions will continue to redeem these bonds. Additionally, you can convert paper bonds to electronic format through the SmartExchange program offered by TreasuryDirect. There is no fee to switch to electronic savings bonds, nor will your bonds lose accrued interest. Not only can you convert bonds that you own, but also bonds that you’ve given as a gift or inherited. Electronic format lets you redeem bonds 24 hours a day, and there is no limit to how much you can redeem at one time.