Giving Bonds To Children

By | September 16, 2013

Savings

It is a great way to give children the gift of investment and this will give them a great start in life. Their capital will grow and develop while they will have little need for the capital. By the time that they will need to use the money it will have grown and continued to work for the child, making more money and a solid start to their investments.

Treasury direct accounts

To be able to give gifts of bonds you will need to have your own Treasury direct account. These are simple to open and will mean that you will be able to hold any of the bonds that you own on this site.

If you are the parent or guardian of the child then it is possible to open the minor account which you will have attached to your account until the child is 18 years and over.

If you are not the parent you can still purchase a saving bond for a child and you will start this process on your Treasury direct account where you will fill in all the details for the purchase. The bond will appear in your gift box, it will need to stay here for 5 business days before you are allowed to transfer bond to the recipient.

You can purchase savings bonds in various denominations; they are $25, $50, $75, $100, $200, $500, $1000, $5000 and $10,000.

Once the child reaches the age of 18 you can then transfer the minor account to the adult and this is the only time that you are able to de-link an account from your Treasury direct account.

The Gift

It is possible to buy a gift for a child but you are not able to put a message to that gift certificate, so if you want the child to have a memento of the gift then you will need to obtain a gift certificate so that the information can be recorded and sent to the child. You can fill in the details and send this to the child, the Treasury direct have loads of different designs from which you can choose from.

The bonds

The bonds that you purchase will be held for the child in a minor account, they will need to be held for at least a year before they can be cashed in, at which point you will lose three months’ worth of interest that will be attached to the bond. If you have the bond for five years you will however not lose any of the interest when you cash them in. The only circumstances that you can sell a bond within the first year are if a natural disaster has occurred and the capital is needed to rebuild your life.

The bonds can’t be transferred to other people the only way to get the capital back is through the sale of the bond, but the idea of buying a children’s bond is  for growing money and the investment over a period of time. A bond is only valid for the person that originally purchased them. If you are ever offered a paper savings bond then do not purchase it because you will not get any of the money when it matures, the person who is named on the bond is the only person that will be paid.

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