How to Buy War Bonds & Modern Government Securities

War bonds were financial instruments issued by governments during conflicts. They allowed governments to borrow from citizens to fund military operations and wartime expenditures. Heavily promoted during 20th-century conflicts like World War I and World War II, they encouraged public participation. Citizens lent money, receiving principal and interest after a specified period.

Understanding War Bonds in a Modern Context

The U.S. government no longer issues traditional “war bonds” explicitly for military financing. However, it continues to issue various securities that fund government operations, including defense spending. These modern instruments are accessible to the public and allow individuals to invest in the nation’s financial stability.

U.S. Savings Bonds, specifically Series I and Series EE bonds, are modern equivalents. Series I bonds offer a fixed interest rate and a variable inflation rate, protecting against rising prices. Series EE bonds provide a fixed interest rate, designed to double in value over 20 years if held to maturity. Both are long-term savings vehicles, contributing to government funding while offering a secure return.

Beyond savings bonds, the U.S. Treasury issues marketable securities like Treasury Bills, Notes, and Bonds. Treasury Bills are short-term debt instruments maturing in one year or less, sold at a discount. Treasury Notes mature in two to ten years, while Treasury Bonds are long-term, typically 20 or 30 years. These securities are fundamental to financing the government’s budget, including defense, and are widely used by investors seeking low-risk investments.

Acquiring Historical War Bonds

Individuals seek historical war bonds for their collectible or historical value, not investment returns. These documents offer a tangible connection to significant national history. Online auction sites are common venues for these bonds. Specialized numismatic or memorabilia dealers often carry a selection, sometimes alongside other antique financial instruments.

Antique shops, estate sales, and private collectors are also sources for these unique historical pieces. When purchasing, assess authenticity to distinguish genuine bonds from reproductions. The bond’s condition, rarity, and historical significance (e.g., famous signature, unique series) influence its collectible value. Collectors prioritize well-preserved bonds with clear historical provenance.

Some historical U.S. Savings Bonds may still be eligible for redemption, though interest accrual typically ceased decades ago. For instance, Series E bonds stopped accruing interest 40 years after issue, and Series EE bonds generally stop after 30 years. The U.S. Treasury or TreasuryDirect provides a process for checking value and redeeming eligible unredeemed bonds. Individuals typically submit original bond certificates, with required identification and banking information, to the Treasury for processing.

How to Purchase Current U.S. Government Securities

The primary method for purchasing current U.S. government securities, including Savings Bonds and Treasury securities, is TreasuryDirect. This online platform allows individuals to buy directly from the U.S. Treasury without fees or commissions. Establishing a TreasuryDirect account is the initial step, requiring personal information like your Social Security number and bank account details for transactions.

Once an account is established, users select the specific security type to purchase, such as Series I or EE bonds, Treasury Bills, Notes, or Bonds. The platform guides the user through selecting investment amounts and purchase dates. For example, buying Series I or EE bonds involves specifying the amount, with the system debiting your linked bank account. For Treasury Bills, Notes, and Bonds, you can place competitive or non-competitive bids during auctions or purchase them on the open market.

While TreasuryDirect is the most common avenue, Treasury securities can also be purchased through commercial banks or brokerage firms. These institutions act as intermediaries, facilitating client purchases. However, buying through them may involve transaction fees or commissions, avoided when purchasing directly from TreasuryDirect. Managing holdings, receiving interest payments, and initiating redemptions are also handled through the TreasuryDirect account, providing a centralized system for investors.