Savings Bonds for Kids and Grandkids: How EE and I Bonds Work in 2026

A savings bond is a loan to the U.S. government that pays interest and can't lose value. Grandparents have given them to kids for generations. They still work as a gift, but the way you buy them has changed: paper bonds are gone, everything happens online at TreasuryDirect, and a child needs an account set up by a parent before a bond can be delivered to them.

EE bonds vs. I bonds

The Treasury sells two kinds of savings bonds. Both are backed by the U.S. government, and neither can fall in value.

New rates are announced every May 1 and November 1, so check the current rate on TreasuryDirect before you buy. A bond keeps the fixed rate it was issued with.

The rules that apply to both

• Locked for 12 months. A bond can't be cashed in its first year.
• Small penalty before 5 years. Cash it before five years and you lose the last three months of interest.
• Earns for 30 years, or until it's cashed.
• $10,000 a year per person, for each type. That's $10,000 of EE and $10,000 of I bonds per Social Security number per calendar year. A gift counts toward the child's limit in the year it's delivered, not the giver's.
• Electronic only. Buying paper I bonds with a tax refund ended on January 1, 2025.

How a parent buys bonds for a child

1. Open your own TreasuryDirect account. From late October 2026, TreasuryDirect requires an ID.me login, so set that up first.
2. Inside your account, create a minor linked account for your child with their Social Security number.
3. Buy bonds in the minor account. They're registered to your child, and you manage them until your child is 18.

How a grandparent gives a bond

A grandparent can't buy directly into a grandchild's account. Instead:

1. The grandparent buys a bond in their own TreasuryDirect account as a gift, registered to the child's name and Social Security number. It waits in their "gift box."
2. The child's parent sets up a minor linked account and shares its account number.
3. After at least five business days, the grandparent delivers the bond to that account.

A bond can sit in the gift box until you're ready, which is handy for a birthday or holiday. If the gift is for a grandchild, the grandparent's account guide compares bonds with the other options.

Taxes

• Interest is free of state and local income tax.
• Federal tax can wait until the bond is cashed or stops earning after 30 years.
• Interest on a bond in your child's name is your child's income. You can choose to report the interest each year instead of all at once, which can keep it under the kiddie tax thresholds.

The college tax break, and its catch

Bond interest can be federally tax-free when it's used for college, but only if the bond is owned by someone who was at least 24 when it was issued. A bond in your child's name never qualifies.

To use it, a parent cashes the bonds and pays qualified education costs in the same year, or contributes the money to a 529 plan for the student. The break phases out at higher incomes. For 2026, that's modified adjusted gross income between $152,650 and $182,650 for joint filers, and $101,800 to $116,800 for most others.

What happens at 18

A minor account doesn't convert by itself. Once your child turns 18 and opens their own TreasuryDirect account, you move the bonds into it, and they're your child's to manage. Until then, almost everything in the old account stays frozen.

Are bonds a good fit for a kid?

Bonds suit money that should never drop in value, and they make a tangible gift. Over 18 years, though, they've usually grown more slowly than invested money in a 529 or UTMA, and the $10,000 limit caps how much you can put in. Many families use bonds alongside other accounts, not instead of them.

Where MemoryBank fits

TreasuryDirect can't be linked to outside apps. In MemoryBank you can add your child's bonds as a manual account with their current value, so they show up next to the accounts that are connected.

Rates and rules are as TreasuryDirect and the IRS published them in October 2026 and change over time. MemoryBank is not a brokerage. It cannot receive, keep or transfer securities. For tax questions, talk with a tax professional.

Frequently asked questions

Can you still buy savings bonds for kids?

Yes, electronically at TreasuryDirect. A parent opens their own TreasuryDirect account, creates a minor linked account for the child, and buys EE or I bonds in it. Paper I bonds bought with a tax refund ended on January 1, 2025.

How do grandparents give savings bonds?

The grandparent buys a gift bond in their own TreasuryDirect account, registered to the child's name and Social Security number. The child's parent sets up a minor linked account, and after at least five business days the grandparent delivers the bond to that account number.

Are I bonds or EE bonds better for a child?

It depends on what you want. EE bonds pay a fixed rate and are guaranteed to double in value by 20 years. I bonds pay a fixed rate plus an inflation rate that resets every six months. Compare the current rates on TreasuryDirect, which change every May 1 and November 1.

How much in savings bonds can a child get each year?

Up to $10,000 of electronic EE bonds and $10,000 of electronic I bonds per Social Security number per calendar year. Gifts count toward the child's limit in the year they're delivered.

Are savings bonds tax-free for college?

They can be federally tax-free for college, but only if the owner was at least 24 when the bond was issued, so bonds in a child's name don't qualify. The parent-owner cashes them and pays qualified costs or contributes to a 529 in the same year, and the break phases out at higher incomes.

Can I track my child's savings bonds in MemoryBank?

TreasuryDirect can't be linked to outside apps, but you can add your child's bonds in MemoryBank as a manual account with their current value, so they show up next to the accounts that are connected.

What to do next

1. Set up your TreasuryDirect login with ID.me if you don't have one yet.
2. Create a minor linked account for each child who will receive bonds.
3. Send that account number to any grandparent who plans to give bonds.