When I was young and someone's grandchild, savings bonds were a gift I got to commemorate birthdays, graduations and other major events. The bonds weren't large in terms of denomination but the US. Treasury bills were loaded with meaning for my immigrant forbears. For me, the heavy-ish feel of the paper and official look of the bonds made them special and made me feel very grown up.
Paterfamilias and I have strayed from that tradition for our Grands--we're more into loading up 529s--but lots of people like the physicality of a savings bond and the meaning a US Treasury bond implies. With the U.S. Treasury going digital, though, it is getting more complicated to tuck a savings bond into a "Happy Birthday" card and send it off to a grandchild.
Two years ago, the federal government pretty much eliminated paper savings bonds. Before, if we had wanted to give a savings bond as a gift for a Grand's birthday, we would have done it the old-fashioned way: made our way to our bank and filled out a form to buy the bonds, which would then be mailed to us. We could then slip them into a card or package and give our gift. But now, it's all digital. We and the Grand we're gifting must each set up special online accounts--and we'll need our Grand's Social Security number in the bargain.
So it's easier in a way--no more trip to the bank. But more complicated,especially for those not comfortable doing financial transactions via the Internet.
The Treasury Department considers digital bonds more secure: With no paper to keep track of, there’s no risk of losing them and having to have them reissued.
Demand for savings bonds had declined even before the switch away from paper, partly because of low interest rates for the past few years. But should those rates rise, be prepared to operate digitally if you want to give your Grand a safe and sound investment in the future of the country. Once the online accounts have been set up--yours and theirs (which, if they are under 18 years of age, a parent or guardian must establish in his or her own name and set up a linked account for a minor)--you buy the bond online and transfer it to them online. You can then print out a paper gift certificate as something tangible to tuck into a birthday or graduation card. But the hefty feel of that T-gift paper: Gone for good.
