Savings Bond Gift Rules: How to Gift an I Bond or EE Bond

You can gift U.S. savings bonds—both I Bonds and EE Bonds—using the TreasuryDirect gift-box mechanism, which lets you purchase bonds as a gift and deliver them within a one-year window. The annual exclusion for gift tax is $18,000 per recipient (as of 2024); beyond that, you may owe gift tax unless you’ve already used your lifetime exemption.

The TreasuryDirect Gift Box

The easiest way to gift a savings bond is through the online gift box on TreasuryDirect (the U.S. Treasury’s direct-purchase platform). Here’s how it works:

1. Create or log into your TreasuryDirect account at treasurydirect.gov.
2. Select “Gift Box” under the purchase menu.
3. Choose the bond type: I Bond (inflation-adjusted) or EE Bond (fixed-rate).
4. Specify the gift amount and recipient’s email address.
5. The recipient receives a notification with a link to claim the bond.

Once claimed, the bond is registered in the recipient’s Social Security number and TreasuryDirect account—they own it outright.

Key timing rule: You have up to one year from purchase to deliver the bond to the recipient. This window matters because it lets you lock in the current rate now and decide when to hand it over later. If you’re waiting for a high I Bond rate to launch, you can buy at that moment and then gift it to the recipient months afterward, and they’ll receive the locked-in rate you purchased at.

Gift-Tax Implications

Gifts of money or property are generally subject to gift-tax rules, but there’s an annual exclusion:

Within the annual exclusion: Gifts of savings bonds are not taxable income to the recipient, and you don’t file a gift-tax return if you stay within the annual limit.

Over the annual exclusion: If you gift more than $18,000 in a single year to one person, you must file Form 709 (Gift Tax Return) with the IRS. However, you don’t pay gift tax unless you’ve already exhausted your lifetime exemption; instead, the excess counts against that exemption. Married couples can combine exclusions ($36,000 total per recipient) if they both agree to split the gift on Form 709.

No income tax on the recipient: The recipient pays no income tax on the gift itself—though they will owe tax on the interest when the bonds are redeemed or reach final maturity (unless they’re held in a tax-advantaged account).

Who Can Receive a Gift

• U.S. citizens and residents (anyone with a valid Social Security number).
• Minors: Yes, but the bonds are registered to the minor’s SSN. Parents or guardians manage the account until the minor reaches the age of majority in their state.
• Non-citizens: Possible if they have an ITIN, but TreasuryDirect’s procedures can be stricter; check their website for current rules.

I Bonds vs. EE Bonds as Gifts

Inflation-sensitive household: An I Bond gifted now locks the inflation rate component (not the fixed portion, which changes over time) at the time of purchase, protecting the gift from future inflation spikes.

Predictability preference: An EE Bond gifts a known rate, making the future value calculable.

Considerations Before Gifting

Lock-in timing: I Bond rates reset every six months; if a rate is about to drop, buy before the cutoff and gift later. EE Bond rates are fixed for 30 years, so timing matters less.

Final maturity: I Bonds and EE Bonds mature in 30 years. The recipient can hold them indefinitely beyond that (with interest halting) or redeem earlier.

Redemption rules: Bonds cannot be redeemed in the first year; a 1% penalty applies if redeemed before five years. The recipient should understand these constraints.

Education plans: If the gift is for education and redeemed for qualified education expenses, the federal tax on the interest can be waived—but only if the bonds were registered to the parent (not the child). This is an advanced strategy that requires careful naming.

The One-Year Delivery Window Strategy

Smart gift-givers use the one-year window strategically:

• Buy in a favorable I Bond rate month (e.g., when the inflation-adjusted rate is historically high).
• Hold in the gift box for up to 12 months.
• Deliver closer to the recipient’s birthday or holiday, ensuring they receive the rate you locked in rather than today’s potentially lower rate.

This is especially powerful with I Bonds, where the rate resets biannually—you capture a specific rate cycle and hand it to the recipient later.

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