It's tough to buy a savings bond online
Saving money for nieces, nephews and grandkids used to be as simple as showing up at the bank to buy a savings bond.
But now that you can't buy bonds at banks, some fiscally focused grandparents aren't going to be happy.
“It's just not easy to give an electronic bond,” said McKayla Braden, a spokesperson for the Treasury's Bureau of Public Debt.
Sure, people are buying all sorts of gifts online, fairly painlessly. But trust me, a savings bond isn't in that quick-and-easy category. It could be simpler to draw up blueprints for a gingerbread house. Or maybe build a gingerbread bank.
This is the first holiday season that paper savings bonds aren't being sold at banks. The traditional sale of paper bonds was basically eliminated last January.
Savers must go through a complicated online system to buy digital bonds. And this new digital way is not going to win popularity contests.
Sticking points: You must open an online account — and on top of that make sure the recipient takes the time to set up a TreasuryDirect account, too. Parents will need to set up TreasuryDirect minor-linked accounts for each child younger than 18.
Many seniors are simply frustrated. “They're saying, ‘I don't think so,' “ said Daniel Pederson, who blogs about savings bond issues at BondHelper.com.
Total online bonds sales for fiscal 2012 reached $590.1 million — but a large portion of that hit in January 2012 when there was a bit of confusion about where to find paper bonds. Some “people thought they were buying paper bonds online,” Braden said.
In fiscal 2012, savers bought $1.94 billion in savings bonds, including digital and paper bonds. Paper bonds totaled $1.35 billion.
Is it worth it?
Well, some families think savings bonds can be a gift that doesn't generate more toy fatigue. But one girlfriend who is generous with her extended family told me that she found the savings bond online system to be a pain. Young mothers in her family took weeks to set up a child's account. Eventually, it worked out. “It's complicated,” Braden said. “It's more complicated than just dropping into their bank.”
There isn't a lot of bang for the bond, either.
A new Series EE savings bond bought now through April 30 has a fixed rate of 0.2 percent.
If you want to buy savings bonds, the Treasury has a tip sheet and a video at www.treasurydirect.gov/readysavegrow /.
To test the system — and give some cash to little ones — I asked my niece whether she'd first set up an account for her son, Carson, and her baby daughter, Penny. I sent her a link to the Treasury's tip sheet.
My niece said it took her about five minutes to set up. “Pretty easy,” she said.
After talking with my niece, I went to TreasuryDirect.gov, and it took me 23 minutes to set up my account and buy one I Bond for myself.
It can take time to carefully type in numbers, write down answers for three security questions, select a personalized image and caption, and retrieve two emails from Treasury for the account number and onetime password.
When you log into your account, there is a “Purchase Express.” I bought one bond here for myself but realized later that I registered it only in my name, not including my husband's name, as I would have wanted.
Red letters on the purchase express feature say, “Not for gift bond purchases.”
How do you buy a gift bond? I dug for the Treasury's tip sheet.
The tip sheet was useful, but during this process, I somehow bought myself a $25 bond by mistake. I realized later that I could have hit cancel but ended up hitting submit. I don't think that bond includes my husband's name, either.
Watch that “Add Registration” line near the top. You must add the registration of the child. But then you also must use a scroll-down on the top bar to make sure the registration is locked in for that next purchase.
You need that child's Social Security number and the parent's Social Security number if you want the bonds in two names.
Eventually, I registered the two $25 bonds for my niece's children. I spent about 45 minutes, not including some breaks to clear my mind.
We're not done here.
When you set up a TreasuryDirect account, the gift bonds are placed in your “gift box,” and then you deliver the bond electronically to the recipient. I bought bonds on a Friday, so I had to wait until Monday for the bonds to show up in my gift box.
Susan Tompor is the personal finance columnist for the Detroit Free Press. Email her at email@example.com