Your Savings Bond Questions Answered
The Basics Everyone Should Know
BOND, SAVINGS BOND
Over the last few months, our team has received dozens of questions about savings bonds. Clearly, these investments are a hot topic — and we’re here to help! Read on to learn the savings bond basics. What is a savings bond?
A savings bond is a low-risk, long-term investment backed by the U.S. government. When you purchase a bond, you have a guaranteed return because the bond will earn interest at a fixed rate either until you cash it in or until it reaches 30 years old. Are there limits on the number of bonds that can be acquired per year? You are allowed to acquire a maximum of $10,000 for electronic EE bonds and a maximum of $10,000 for electronic I bonds, and when you file your income tax return, you can acquire a maximum of $5,000 worth of paper I bonds. You are allowed to purchase bonds that will be owned by someone else (a gift), but that purchase will affect that person’s ability to acquire more bonds. The restriction applies to the owner of the bond(s), not the purchaser. This is tracked by the Social Security number of the first person named on the account. Should I transfer my savings bonds to my trust? Yes! To do this, you first need to create a TreasuryDirect account in the name of your trust. This is very simple. Visit TreasuryDirect.gov and click on the “Individuals” tab. Then, under “Account Center,” click “Open an Account.” During the setup process, remember to click the “Trust” button under “Entity Account” to confirm the account is owned by your trust. How do I transfer savings bonds? To transfer bonds from your individual account to your trust, visit TreasuryDirect.gov and click “Forms.” From there, choose “Savings Bonds” and select “FS Form 5511.” Fill out the form and ask your bank, brokerage house, or trust company to “Medallion Guarantee” your signature. Finally, mail the form and, if you have them, the original bonds to Treasury Retail Securities, P.O. Box 9150, Minneapolis, MN 55480-9150. We recommend sending any original bonds through registered mail and insuring them with your shipping courier. How do I reissue paper savings bonds? To reissue paper bonds, visit TreasuryDirect.gov and click “Forms.” From there, choose “Savings Bonds” and select “FS Form 1851.” Fill out the form and follow the directions in the “How do I transfer savings bonds?” section of this article to guarantee your signature and mail your form. Note: The Treasury no longer offers new paper bonds, so your bonds will be reissued in electronic form. If you still have questions about savings bonds, please do not call our office. Instead, tune in to our November Q&A session on Friday, Nov. 18. We will discuss the topic of savings bonds in extensive detail and answer all your questions then.
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