Reminder: Savings Bonds Monthly Purchase Deadline Tips

Here’s a reminder regarding an opportunity to buy savings bonds near the end of May and receive an annualized return of 2.51% over the next 11 months. This would be 1% more than the highest current CD rates, with potential for continued higher interest. See this previous post for more details. The main catch to this opportunity is that you will not be able to sell your savings bonds at all for the next 11 months.

The reason why you want to buy at the end of the month is that savings bonds are labeled by month, and as long you buy anytime in May, it will be stamped with a May 2011 date. Then, on the first day of May 2012, you can redeem for an entire year’s worth of interest. However, you don’t want to miss the deadline, because then your bond will end up an April 2011 bond. The annual purchase limit is currently $5,000 in paper I-bonds and $5,000 in online I-bonds per Social Security Number. For a couple, that’s $20,000 per year.

For electronic bond purchases, Ken of DepositAccounts conducted an experiment as to how late you can wait to buy them on TreasuryDirect. To summarize, in order to avoid this, you should enter your purchase order a minimum of two business days before the last day of the month. For peace of mind, I would pad it 4 business days. You can schedule your purchase ahead of time online (recommended).

For paper bond purchases, you can visit your local bank and ask to buy them. Here are detailed instructions. Not all banks do this, so check ahead of time. The issue date of the savings bond will be the same day that the bank accepts payment. This date will be noted clearly on the application, and the bank should also stamp it to confirm. In this case, if you are familiar with the bank and you have the money available, you could conceivable wait until the last day the bank is open before the end of the month. Again, I’d try a couple days beforehand to be safe.


  1. Jonathan,

    you said
    “However, you don’t want to miss the deadline, because then your bond will end up an April 2011 bond. ”

    do you mean a june 2011 bond?

    or do you mean upon redemption that it would become an april 2011 bond?

  2. I have my TD account but how to I add my wife’ SSN so that I can buy 5K bonds on her SSN. Do I have to open new account in her name or in the same account after updating registration list, I can buy 5K more of bonds electronically

  3. @Nuri – You are correct, it should be June 2011 bond. Late night typo. 🙂

    @JR – I don’t know if you can add her SSN to make it a “joint” account, but you can buy savings bonds in her SSN in a “gift” account linked to your account. In the future, to redeem, I believe she will need to open her own TD account and the bonds will move over to her new account.

    I have a chunk of savings bonds in my wife’s name via a gift account right now, haven’t gotten around to opening a TD account for her yet.

  4. trying to open online. after you set up do you have to wait for card to be sent see below:

    e are now sending your account number to the e-mail address you provided on your application. You will also be receiving an Access Card in the mail shortly. Your account number, password, and Access Card are needed to log into your TreasuryDirect account.

  5. Jonathan,

    What is the option to defer interest on the Treasury Direct site? I want to collect interest when I have lower income. Also does the deferred interest compound?

  6. @John – The default for savings bonds is to that interest is counted as income when you sell the bonds. So if you don’t sell the bonds, the interest is automatically being deferred and you won’t declare it on your income tax return.

    You can account for the interest each year if you want, but it’s kind of a pain in the butt since you have to keep track of it every year.

    Interest compounds semi-annually.

  7. Jonathan – I missed out on buying in May. If I buy it now, it will be labeled at June 2011 bond. Is there any problem/drawback with that?

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