How to Buy War Bonds: Series, Limits, and Tax Rules

The federal government no longer issues anything called a “war bond,” so the modern way to buy war bonds is to purchase their direct descendants: Series EE and Series I savings bonds. Both are sold only electronically, through the Treasury Department’s platform at TreasuryDirect.gov. Paper savings bonds through a tax refund were the last non-electronic option, and that program ended on January 1, 2025.¹

Choose Between Series EE and Series I

Before you open an account, decide which bond fits. They behave very differently.

Series EE bonds carry a fixed interest rate set at the time of purchase. Bonds issued from November 2025 through April 2026 earn 2.50% per year.² Interest accrues monthly and compounds every six months. The signature feature is a Treasury guarantee that the bond will double in value if you hold it for 20 years, which works out to roughly a 3.5% effective annual return over that period.³ After year 20, the Treasury may change the rate or how the bond earns, and it keeps earning for up to 30 years total.

Series I bonds combine a fixed rate that stays constant for the life of the bond with a variable inflation rate that resets each May 1 and November 1 based on the Consumer Price Index. For bonds issued from November 2025 through April 2026, the fixed rate is 0.90% and the composite rate is 4.03%.⁴ When inflation rises, the composite rate rises with it; when inflation falls, the rate falls too, but it can never go below zero, so your principal is safe.

The short version: pick EE if you want a predictable 20-year doubling and plan to hold that long. Pick I if you want protection against inflation and more rate flexibility.

Open a TreasuryDirect Account

Every purchase runs through TreasuryDirect.gov, and you need an account before you can buy anything. Have these ready:⁵

Your Social Security Number or Taxpayer Identification Number
A U.S. address
An email address
A checking or savings account with its routing and account numbers

From the TreasuryDirect homepage, follow the link to open an individual account, enter your personal and banking information, and submit. If the system approves you, it issues an account number. Keep that number somewhere safe. You’ll need it every time you log in, along with a password you’ll enter using the site’s on-screen virtual keyboard.

One common snag: if TreasuryDirect can’t verify your identity online, it will ask you to mail in additional paperwork, which can delay account activation by weeks. Making sure the name, address, and SSN you enter match what the IRS has on file reduces the odds of that happening.

Place Your Purchase

Once your account is active, buying a bond takes a few minutes:

Log in with your account number and password.
Click BuyDirect at the top of the account summary.
Pick Series EE or Series I from the available securities.
Enter a dollar amount. Any amount from $25 to $10,000 works, down to the penny — a $75.38 purchase is fine.⁶
Choose the bank account you linked at registration as the funding source.
Review the confirmation screen and submit.

Your bank account is debited and the bond lands in your TreasuryDirect holdings. Nothing comes in the mail. You own and manage it entirely on the site.

If you’d rather automate things, use the Purchase Frequency option during BuyDirect and select “Schedule repeat purchases.” You can set weekly, biweekly, monthly, bimonthly, quarterly, semiannual, or annual intervals, scheduled up to five years out, or pick specific dates that suit you.⁷ Keep enough cash in the linked account on each scheduled date, or the purchase will fail.

How Much You Can Buy Each Year

Each Social Security Number is capped at $10,000 in electronic EE bonds and $10,000 in electronic I bonds per calendar year, for a combined ceiling of $20,000 per person.⁸ The old $5,000 paper I bond allowance that used to run through tax refunds is gone with the paper program.

If you have both an individual account and an entity account (such as a trust) under the same SSN, each account has its own limit.⁸ Gift bonds count toward the recipient’s annual cap, not yours.

Buying Bonds as a Gift or for a Child

Savings bonds are a common gift, but gifting them takes a little coordination because both you and the recipient need TreasuryDirect accounts.⁹ To buy a gift bond you need the recipient’s full name, Social Security Number, and TreasuryDirect account number.

You buy the bond through BuyDirect in the usual way but designate it as a gift. It sits in your account’s gift box for at least five business days before you can deliver it. Once delivered, the bond is registered in the recipient’s name, and that registration is irrevocable.¹⁰

For a child under 18, a parent or other adult can set up a linked minor account inside their own TreasuryDirect account. The child owns the bonds, but the adult controls the account until the child turns 18. No login credentials need to change hands.

When You Can Cash Them In

You can redeem an electronic savings bond anytime after holding it for 12 months.¹¹ Log in, open ManageDirect, click “Redeem securities,” and the cash is deposited into your linked bank account.

Two timing rules shape when you should actually do it:

During the first 12 months, you cannot redeem at all. The money is locked.
Between year one and year five, redeeming costs you the last three months of interest. On a $10,000 I bond earning around 4%, that forfeited interest is roughly $100.¹¹

Hold past five years and you keep every penny of interest. Both EE and I bonds stop earning after 30 years, so there’s no reason to leave one sitting in the account past that point.³

What You’ll Owe in Taxes

Interest on savings bonds is subject to federal income tax but exempt from state and local income taxes.¹² If you live in a high-tax state, that exemption meaningfully improves your effective return.

You have two options for timing. Most people defer federal tax until they cash the bond or it reaches final maturity, at which point they receive a 1099-INT covering all the accumulated interest. The alternative is to report interest each year as it accrues.¹² Annual reporting can make sense for a child whose income is low enough that the yearly interest attracts little or no tax.

There’s also a potential education exclusion. If you use the bond proceeds for qualified higher education expenses, you may be able to exclude the interest from federal tax entirely. The bonds must have been issued after 1989 in your name (not a child’s), you must have been at least 24 years old when they were issued, and you cannot file as married filing separately. For 2025, the exclusion phases out between a modified AGI of $99,500 and $114,500 for single filers, and between $149,250 and $179,250 for married couples filing jointly. These thresholds are typically adjusted for inflation, so confirm the current figures on Form 8815 before relying on them.

1
TreasuryDirect. Using Your Income Tax Refund to Buy Paper Savings Bonds
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TreasuryDirect. Fiscal Service Announces New Savings Bonds Rates
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TreasuryDirect. EE Bonds
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TreasuryDirect. I Bonds Interest Rates
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U.S. Department of the Treasury. Open an Account – TreasuryDirect
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TreasuryDirect. Buying Savings Bonds
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TreasuryDirect. Setting Up Recurring Purchases in TreasuryDirect
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TreasuryDirect. Savings Bonds – How Much Can I Spend/Own?
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TreasuryDirect. Giving Savings Bonds as Gifts
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eCFR. 31 CFR 363.96 – What Do I Need to Know if I Initially Purchase a Bond as a Gift?
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TreasuryDirect. Cashing EE or I Savings Bonds
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TreasuryDirect. Tax Information for EE and I Bonds