Can You Buy I Bonds for Kids?

Yes, you can buy I bonds for kids, and they can be a good investment. Here’s what to know.

Written by Casey Bond / September 26, 2022
Reviewed by Conrad de Aenlle

Quick Bites

  • You can buy inflation-protected Series I bonds in a child’s name.
  • The amount you can purchase electronically for anyone, including a child, is capped at $10,000 per person, per calendar year.
  • The interest earned on I bonds is subject to federal taxes in most cases, but not state or local taxes.

Looking for a gift for your 8-year-old niece? Why not try a Series I savings bond, or I bond, issued by the U.S. Treasury. Sure, she’d probably prefer the newest Lego Friends house—prepare yourself for her disappointment—but she’ll love you once she can cash in that bond.

You can buy an I bond for your own child or anyone else’s. And the cost starts at just $25. We’ll break down how you can go about it, and why it’s an inflation-safe bet in an increasingly uncertain economic world where, let’s be honest, who can afford those Legos anyway?

Inside this article

  1. How to buy I bonds for kids
  2. When can the I bond be cashed?
  3. What about buying paper I bonds?
  4. Will the I bond be taxed?

How should I buy I bonds for a kid?

First off, you can purchase anywhere from $25 to $10,000 in gift bonds. That sure beats the Lego Friends Vacation Beach House retailing on the official website for $79.99.

When purchasing an I bond for a child, you have a couple of options. You can buy it in your name and then gift them the cash once the bond matures. That’s easier, as the kid wouldn’t need an account.

Or you can buy the bonds in their name, which requires their basic information.

To buy an I bond in your name, you first need to have an account set up on the TreasuryDirect website. Have your Social Security number and bank account information handy for this. Then go ahead and make your purchase.

To buy in a kid’s name, you’ll need their full name and Social Security number. Create an account on the TreasuryDirect website, or log in if you already have one.[1] The recipient must also have their own TreasuryDirect account. If it’s your kid, go ahead and set one up. If it’s not your kid, you can hold the gift in your account until one is established for them.[2]

Once you purchase the bond, you can deliver the gift to the recipient by going to your “Gift Box” and entering the recipient’s TreasuryDirect account number. You can also go the old-fashioned way and get a paper I bond. More on that later.

When can the kid (or adult) cash the I bond?

I bonds mature in 30 years, but they can be cashed after 12 months. If the child cashes in their bond during the first five years, they’ll have to pay a penalty of three months’ worth of interest.[3]

Are I Bonds a Safe Investment?

Are I Bonds a Safe Investment?

I bonds are safe in the sense that they’re backed by the U.S. government. But there’s more to know about this inflation-protected investment.

Find out more

And then there’s the question of accessing the TreasuryDirect account.

The Treasury Department considers a child’s bank account to belong to the child and the child alone; although custodians, usually parents, are in charge until the child turns 18. Only then can the child access the account, which to them will seem like eons away.[4]

“Whether you wish it or not, management of the account reverts to the child at the age of 18,” says Lyle Solomon, consumer finance expert and principal attorney at Oak View Law Group in Auburn, California. And then they can spend it however they want.

The custodian of the account can request withdrawals and manage the account until the child takes ownership, and while redemptions can be made at any time, they must be for the benefit of the child beyond the normal cost of providing for them.[5]

What about buying paper I bonds?

Buying I bonds electronically is the most convenient option in most cases. Of course, if you’re buying a bond as a gift, it can be nice to have something physical to give. Keep in mind that if you go this route, you won’t be able to buy as much as you can electronically.

“Adults can buy paper bonds of up to $5,000 for a minor child,” says Andrew Aran, a Certified Financial Advisor and managing partner at Regency Wealth Management in Ramsey, New Jersey.

One thing to note: To do so, you have to use your tax refund (otherwise, you simply can’t buy paper bonds) and fill out IRS Form 8888. Paper I bonds are issued in denominations of $50, $100, $200, $500 and $1,000.

Will the I bond be taxed?

You will have to pay taxes to the federal government, but that can be deferred until you cash in the bond. The exception is if you use the interest to pay for qualified education expenses.

So, there you have it. You can most certainly buy an I bond for a child.

It’s a Great Time to Buy I Bonds

It’s a Great Time to Buy I Bonds

If you purchase an I bond anytime from May to Oct. 31, you’ll get an annualized 9.62% return for the first six months—that’s pretty impressive.

Find out more
Article Sources
  1. “How to Buy a Gift Savings Bond in TreasuryDirect,” TreasuryDirect,
  2. “How to Buy Savings Bonds for Kids,” Experian,
  3. “How I Bonds Can Help You Fight Inflation,” Consumer Reports,
  4. “Must-Know Facts About UGMA/UTMA Custodial Accounts,” Fidelity,
  5. “Custodial Account (UGMA/UTMA),” Janus Henderson,

About the Authors

Photo of Casey Bond

Casey Bond

Casey Bond is an award-winning writer who has been covering personal finance for more than a decade. Her work has also appeared on Yahoo!,, Fortune, MSN, Business Insider, The Motley Fool, U.S. News & World Report, Forbes, TheStreet, and more. She is a Certified Personal Finance Counselor.

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Conrad de Aenlle

Conrad de Aenlle

Conrad de Aenlle is a writer and editor with more than 30 years of experience in topics related to financial services and investment, including market performance, portfolio management, economics, retirement issues, estate planning, taxation and insurance.

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