Again, a prod to deliver gift-box savings bonds. Quickly.
By David Enna, Tipswatch.com
Savings Bond investors who are holding I Bonds in “gift-box” storage are getting emails from TreasuryDirect this week advising them to deliver the bonds to the intended recipient. Like (hint, hint) now.
I haven’t received the email, because I delivered all our gift-box I Bonds in 2024, also the year they were purchased. But readers have sent me the text:
Dear TreasuryDirect Customer,
Treasury is always looking for ways to enhance your experience. This includes simplifying the gift bond delivery process. Our records show that your account holds undelivered gift bond(s). To best prepare for coming changes, we recommend delivering your gift bond(s). Delivering gift bond(s) enables your recipient to experience the full benefit of your gift.
Promotes Timely Access and Ownership: Maybe you’re waiting for a certain milestone to gift your bond or simply haven’t gotten around to it. Remember, the registered recipient is the sole legal owner of the bond as soon as you purchase it. Delivering the gift bond promptly ensures the smoothest gifting process.
Grows Investments and Financial Awareness: Delivering gift bond(s) to younger recipients can give them a head start on financial literacy. These bonds may also serve as valuable resources for tuition costs or other important life expenses down the road.
This email echoes the rather vague instructions TreasuryDirect sent a year ago, which I wrote about in this post: “Deciphering TreasuryDirect’s mysterious gift-box email.” In that email, Treasury advised: “Please deliver your gift to the recipients account as soon as possible.” Then in early January 2025, TreasuryDirect sent out a survey about the gift-box process, raising more questions. But since then … silence.
The key words of this new email are “coming changes.” That is an explicit signal that changes are coming to at least the gift-box program and possibly in a broader sense to the entire savings bond system.
Plus, we now have an FAQ
The TreasuryDirect email includes a link to frequently asked questions about this gift-box issue. Here are the Qs and As, along with my thoughts:
How do I deliver a gift savings bond?
Visit TreasuryDirect, log into your account, visit the Gift Box tab on your account page, select the bond, and click “deliver.” You will then enter your recipient’s information, including your recipient’s TreasuryDirect account number. Visit the “How to deliver a gift savings bond — TreasuryDirect” page for more information and to view a video tutorial.
Reaction: The video has good step-by-step instructions. Notice that you need the TreasuryDirect account number of the recipient to complete this process. This should be no problem for most people (couples, for example) but could be a sticking point if the recipient is your niece currently living in France.
How is Treasury enhancing the experience of TreasuryDirect customers?
Treasury is always looking to improve your experience. Future enhancements are still being determined, but we will share information as it becomes available.
Reaction: Purposely vague, but a clear indication that changes are coming to the savings bond process. Hint: I would suggest raising the annual per person purchase limit from $10,000 to $20,000 (or higher), which would mostly eliminate the need for gift-box purchases.
I am sure that TreasuryDirect realizes that the gift-box process is heavily used by sophisticated investors looking to expand their inflation-protected holdings in a very safe investment, the I Bond. So why not adjust I Bond sales to reflect that demand?
Is the gift bond program being eliminated?
At this time, the gift bond program is not being eliminated. However, we will share more information as it becomes available.
Reaction: Vague and not conclusive. I read it as “we are considering all options,” but I suspect Treasury has some solid ideas to de-emphasize gift-box purchases.
Is there a deadline for delivering gift bonds?
Delivering gift bonds proactively prepares you for upcoming enhancements and enables your recipient to experience the full benefit of your gift.
Reaction: Again, this is an all-out announcement that changes are coming.
Is delivering my gift bonds mandatory?
You are encouraged to deliver gift bonds now to ensure you are prepared for coming enhancements and so your recipient can experience the full benefit of the gift bond.
Reaction: Last year, I Bond investors were dizzy when TreasuryDirect seemed to ask them to deliver gift-box purchases “as soon as possible.” That was counter to “accepted” beliefs about delivery limits per year.
We all thought a $10,000 delivery would not be allowed in a year when the recipient had reached the purchase cap. Wrong. We thought multiple purchases and immediate deliveries would never be allowed. Wrong. We though maybe future purchases by the recipient would be limited. Wrong.
New instructions: You are encouraged to deliver gift bonds now. Got it?
What happens if I don’t deliver my gift bond(s)?
Gift bond recipients are the sole legal owners as soon as they are purchased, so holding undelivered gift bonds introduces potential complications.
Reaction: Potential complications? Not under the current gift-box system, but possibly after changes are made. I am not sure what to make of this.
Is there a limit to how many gift bonds I can deliver to their recipient(s)?
You can only deliver one gift bond at a time. There is no limit to the amount a recipient can receive; however, once they have received $10,000, they should not purchase additional savings bonds that year because gift amounts are applied towards the purchase limit.
Reaction: BOOM! There are two very important messages here: 1) You can deliver gift-box purchases one at a time, but as often as you like, which means unlimited deliveries are possible. 2) The gift-box delivery will count toward the recipient’s purchase cap, but only if they have not yet made a standard purchase this year.
In other words: Have the recipient make the standard $10,000 purchase first, then deliver any or all gift-box items to the recipient, one at a time. That’s how I read this and it is also how the process worked last year, surprisingly.
This is an “almost-clear confirmation” of what we have been experiencing.
Can my recipient cash out gift bonds over the annual purchase limit once they’re deposited into their account?
There is no limit to the amount of bonds a recipient can cash out from their TreasuryDirect account, regardless of how the bonds were acquired. Bonds can only be cashed out if it has been at least one year since the bond was purchased.
Reaction: There never was any restriction on the number of bonds any person could redeem, once the bonds are in their account and have passed the one-year deadline. But this clarifies that is true.
Does the recipient have to accept the gift bond for it to be delivered?
The recipient does not have to accept the gift bond for it to be delivered. … Undelivered gifts remain in the purchaser’s gift box, which prevents the intended recipient from benefiting from the gift.
Reaction: A person might logically reject the gift bond if that person wanted to first purchase I Bonds the standard way, before receiving the gift. I would guess that most “trusted partners” would coordinate on the deliveries. Also, if the recipient has not yet opened a TreasuryDirect account, that would delay the process.
What happens to undelivered gift bonds in the account of someone who has died?
A Treasury gift bond belongs to the recipient and is considered the property of the named recipient from the moment it’s purchased. Estate laws vary from state to state — please work with the executor or legal representative if either the gift giver or the recipient is deceased.
Reaction: If you think you could be close to death, deliver those gift I Bonds immediately. No reason to get probate courts involved in this process. I think it is a good idea to reduce TreasuryDirect holdings as you get closer to “lifetime expiration.” Let the T-bills mature, for example. I Bonds in a “with” ownership account with your spouse are probably OK; others may have different advice.
Still having trouble?
If you can’t find the answer to your question, call us at 844-284-2676 from Monday-Friday, 8am-6pm.
Reaction: Before you call, locate your TreasuryDirect account number. I called. The answering phone message immediately confirms that the gift-box email was legitimate. I punched through to get to a Fiscal Services agent.
I told the agent I was a journalist and asked: “Can you tell me what changes are coming to the TreasuryDirect system?” Answer: “I can’t provide information on that at this time.” Question: “But you do know about the changes?” Very long pause. “No.”
I also asked for clarification on the “have recipient purchase first and then deliver unlimited gift-box sets to that person” question. Answer: “That will work but the system may reject the purchase.” Question: “But it will be OK if the deliveries are done one at a time?” Answer: “That is correct.”
Question: “So a person could go in today and buy multiple sets of gift-box I Bonds and then deliver them this year?” Answer: “Yes, but you’d have to wait five days to make the delivery.” (The 5-day rule has always been in effect).
Can I guarantee that this is accurate information? No, but it is exactly in keeping with the FAQ that TreasuryDirect provided, so I believe it is.
Is there a strategy?
I have more or less given up on the gift-box strategy after diving in last year. Now I am warming up to buying one set (in my account and my wife’s) later this month. The reason: I was going to make a 2026 purchase anyway, and the fixed rate is likely to fall from 1.10% to 0.90% at the November 1 reset. I might as well buy a couple months early and lock in the higher fixed rate.
Remember, there are no tax consequences incurred when you deliver or receive a gift I Bond. Taxes on interest earned are only owed at redemption.
Eventually, we are going to learn what TreasuryDirect is planning. I thought that last year also with the prodding email followed up by the survey in January. Maybe we will see changes before then end of 2025.
My suggestion to TreasuryDirect, again, is to raise the savings bond purchase limit to at least $20,000 and eliminate the need for excess gift-box purchases. On the other hand, maybe the gift-box loophole will get severely curtailed.
But maybe something weirder is coming, like privatizing or outsourcing savings bond support and management? Emptying the gift-box rolls would make management of savings bonds much simpler. I doubt this would happen, but who knows?
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David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.
