To buy savings bonds for a child on TreasuryDirect, open a minor linked account under your own primary TreasuryDirect account, then purchase electronic Series I or Series EE bonds into it using the child’s Social Security number. The setup takes about ten minutes. The bigger decision is whose name goes on the bonds, because registering them in the child’s name permanently forfeits the federal education tax exclusion.
What You Need and Who Can Open the Account
You need an active TreasuryDirect primary account in your own name, a linked U.S. bank account for ACH funding, and the child’s full legal name and Social Security number.1eCFR. 31 CFR 363.27 – Accounts for Minors
Federal regulations limit who can open a minor linked account to a parent or the person who provides the child’s chief financial support.1eCFR. 31 CFR 363.27 – Accounts for Minors A grandparent who doesn’t financially support the child can’t open one directly. They can, however, buy bonds in their own TreasuryDirect account and deliver them as gifts into an existing minor account, so relatives still have a way to contribute.
Setting Up the Minor Linked Account
Log into your primary TreasuryDirect account and open the ManageDirect tab. Under “Manage My Linked Accounts,” choose “Establish a Minor Linked Account.”2TreasuryDirect. TreasuryDirect Help – How Do I…? Enter the child’s name, Social Security number, and a nickname so you can tell the account apart from your own. Certify the taxpayer information and submit. The system creates a linked account with its own TreasuryDirect account number.
The child is the legal owner of every bond in this account, but you control all transactions until they turn 18.3TreasuryDirect. User Guide Sections 121 Through 130 There’s no separate login for the child. You reach the minor account from your own dashboard.
Choosing Between I Bonds and EE Bonds
Series I bonds pay a rate that adjusts every six months to track inflation. Series EE bonds pay a lower fixed rate, 2.50% as of early 2026, but the Treasury guarantees they’ll double in value at the 20-year mark regardless of the stated rate.4TreasuryDirect. EE Bonds The guaranteed doubling works out to a minimum effective yield of about 3.5% if you hold the full 20 years. Both types keep earning for up to 30 years.
For a child’s long-horizon savings, either works. I bonds hedge against inflation. EE bonds give you a guaranteed floor if you’re confident the bond will stay untouched for 20 years.
Placing the Purchase and Knowing the Limits
From your TreasuryDirect account, click BuyDirect, pick EE or I bonds, and select the child’s linked account as the registration.5TreasuryDirect. Buying Savings Bonds You can buy any amount from $25 to $10,000, down to the penny. The annual cap is $10,000 in electronic EE bonds and $10,000 in electronic I bonds per Social Security number per calendar year.6TreasuryDirect. How Much Can I Spend on Savings Bonds? Because the cap applies to the child’s SSN, purchases in the minor account don’t reduce your own personal limit.
One detail catches families off guard. Gift bonds delivered into the child’s account count toward the child’s annual limit in the year of delivery, not the year they were originally purchased.6TreasuryDirect. How Much Can I Spend on Savings Bonds? If grandparents deliver $8,000 in I bonds this year, you can only buy $2,000 more in I bonds for that child in the same calendar year.
Letting Relatives Gift Bonds Into the Account
A relative first buys the bonds in their own TreasuryDirect account, where they sit in a Gift Box until delivered. To complete the gift, the giver logs in, opens the Gift Box tab, selects the bond, and clicks Deliver. They’ll need the child’s TreasuryDirect account number to finish the transfer.7TreasuryDirect. E-mail from TreasuryDirect The child must already have a minor linked account before anyone can deliver gift bonds, which is why setting up the account first matters even if you’re not the one funding it.
Interest accrues from the bond’s original issue date, so holding a bond in the Gift Box before delivery doesn’t cost the child any earnings.
Register the Bonds in Whose Name?
This is the decision that matters most before you click buy. Federal law allows you to exclude savings bond interest from income when you use the proceeds for qualified higher education expenses like tuition and fees. But the bond owner must have been at least 24 years old when the bond was issued.8Office of the Law Revision Counsel. 26 USC 135 – Income From United States Savings Bonds Used to Pay Higher Education Tuition and Fees A bond registered with a child as the owner will never qualify for this exclusion, no matter how old the child is when the bond is cashed for college.9TreasuryDirect. Using Bonds for Higher Education
If your goal is to fund the child’s education and get the tax break, register the bonds in your own name or jointly with your spouse instead of buying them into the minor account. When it’s time to pay tuition, you redeem the bonds yourself and pay the school. The exclusion phases out at higher incomes: for 2026 it starts shrinking above modified adjusted gross income of $101,800 for single filers and $152,650 for married couples filing jointly, and disappears entirely at $116,800 and $182,650, respectively.10Internal Revenue Service. Revenue Procedure 2025-32
So the tradeoff is real. Bonds in the child’s name are unambiguously the child’s property but give up the education exclusion. Bonds in your name preserve the exclusion but stay legally yours until you spend them on qualified expenses.
Who Owes Tax on the Interest
The child does. Even though you paid for the bonds and manage the account, the child is the registered owner, and savings bond interest is reported on the owner’s tax return.11TreasuryDirect. Tax Information for EE and I Bonds You have two reporting options: defer all the interest until the bonds are cashed or reach final maturity, or report it each year as it accrues.
Annual reporting is often the smarter path for a child with little or no other income, since small amounts of interest may be covered entirely by the child’s standard deduction. Waiting means a potentially larger tax bill when the child is older and earning. Once you pick a method it applies to all savings bonds the child owns, and switching from deferral to annual reporting requires reporting all previously unreported interest in the year you switch.11TreasuryDirect. Tax Information for EE and I Bonds
The kiddie tax can also enter the picture. If your child’s total unearned income exceeds $2,700 in 2026, the excess is taxed at your marginal rate rather than the child’s.12Internal Revenue Service. Topic No. 553 – Tax on a Child’s Investment and Other Unearned Income The first $1,350 is covered by the child’s standard deduction, the next $1,350 is taxed at the child’s rate, and anything above $2,700 is taxed at the parent’s rate.10Internal Revenue Service. Revenue Procedure 2025-32 The rule reaches children under 18 and, in some cases, full-time students under 24. If the child’s total investment income stays under $13,500, you can report it on your own return instead of filing a separate return for the child.
When You Can Cash the Bonds
Savings bonds have a 12-month lockup. Neither I bonds nor EE bonds can be redeemed for any reason during the first year after purchase.4TreasuryDirect. EE Bonds Cashing after that but before the five-year mark forfeits the last three months of interest.13eCFR. 31 CFR 359.7 – Series I Savings Bond Early Redemption Interest Penalty The bond’s value never drops below what you paid, so the penalty only trims earnings.
After five years there’s no penalty. Both series continue earning interest until they hit final maturity at 30 years.14TreasuryDirect. I Bonds Because you control the minor account, only you can initiate redemptions while the child is under 18.
What Happens When Your Child Turns 18
The minor linked account doesn’t automatically convert on the child’s 18th birthday. Your child opens their own primary TreasuryDirect account, and then you de-link the securities from the minor account into that new account.3TreasuryDirect. User Guide Sections 121 Through 130 De-linking deactivates the old minor account. The bonds remain the child’s property throughout the transition, as they were from the moment of purchase.
Watch the tax timing here. If a parent’s name is removed from a bond’s registration during a transfer, any previously unreported interest becomes taxable to the original owner in the year of the transfer. If you’ve been deferring interest, plan for that before you de-link.
A Note on Paper Bonds
If you’ve seen older guidance about buying paper Series I bonds with a federal tax refund, that program ended on January 1, 2025.15TreasuryDirect. Using Your Income Tax Refund to Buy Paper Savings Bonds All new savings bond purchases go through TreasuryDirect electronically. Existing paper bonds continue earning interest normally.