When you have an account with a bank or a brokerage account, usually you can designate a beneficiary (or multiple beneficiaries with split percentages) for your account. The beneficiary gets everything in your account in case you die. It works differently when you have I Bonds in a personal account at TreasuryDirect, where your second owner and beneficiary are set separately for each holding, not for the whole account.
When you have paper savings bonds from many years ago, the co-owner or the beneficiary (or lack thereof) is printed on each bond itself. If you’d like to make a change, you need to open an online account with TreasuryDirect and deposit your paper savings bonds to your online TreasuryDirect account. Then you can make changes to the second owner or the beneficiary by following the same steps below in this post. See How to Buy I Bonds for how to open an online TreasuryDirect account and How To Deposit Paper I Bonds to TreasuryDirect Account.
Registration at Time of Purchase
Within the same TreasuryDirect account, you can own some bonds by yourself without any second owner or beneficiary, some bonds with Person A as the second owner (“you WITH A”), some bonds with Person B as the second owner (“you WITH B”), some bonds with Person C as the beneficiary (“you POD C”), and some bonds with Person D as the beneficiary (“you POD D”). POD stands for Payable On Death. Most people probably don’t need this much granularity but it’s an option.
Whether you name them as a second owner or a beneficiary, it doesn’t affect their annual purchase limit. They can still buy $10,000 in their own account. For more on the difference between a second owner and a beneficiary, please read I Bonds Beneficiary vs Second Owner in TreasuryDirect.
You designate the second owner or the beneficiary at the time of each purchase. The granularity compensates for the lack of designating multiple beneficiaries by percentages at the account level. While you can’t designate 50:50 between your two children as beneficiaries for the whole account, you can enter two orders every time you buy $10,000 worth of I Bonds: one order for $5,000 with Child A as the beneficiary and another order for $5,000 with Child B as the beneficiary.
If you didn’t place separate orders at the time of purchase, you can still split an existing I Bond into parts and name a different beneficiary for each part. See How to Split an Existing I Bond for Multiple Beneficiaries.
Each ownership combination — you alone, you WITH person X as the second owner, or you POD person Y as the beneficiary — is called a registration. You can have as many registrations as you’d like and you can associate any one of your registrations to any bond in your account.
The registration for a bond you set at the time of purchase can be changed post-purchase. If you didn’t set a second owner or a beneficiary when you first bought the bonds or if you change your mind at a later time, you can add, remove, or change the second owner or the beneficiary at any time.
Only a Person, Not a Trust
These options are only available in a personal account. An entity account for a trust or a business can’t have bonds with a second owner or a beneficiary. A trust or a business also can’t be designated as the second owner or the beneficiary. The second owner or the beneficiary must be a person.
Review Current Registrations
Before you make any changes to the registration on any of your bonds in the account, you should review how they’re currently set and see which ones need to be changed. After you log in to the account, click on “Current Holdings” at the top.
Then scroll down to the bottom and select Series I Saving Bond.
You will see a list of your bonds grouped by your existing registrations. Take notes on which bonds you’d like to make a change.
Create Your Desired Registration
Now, you need to create a registration with the ownership combination you’d like to have. Say you originally bought the bond with your name alone and now you’d like to add a second owner, or you’d like to elevate your beneficiary to a second owner, you should create a registration for you with this person as the second owner (“you WITH X”). Or if you’d like to change your beneficiary to a different person, you should create a registration for you with this new person as the beneficiary (“you POD Y”).
Click on “Update my Registration List” under ManageDirect.
You’ll see a list of existing registrations in your account. Click on “Add Registration” to create a new one.
The radio buttons at the top show the registration types. Sole Owner means you alone, without a second owner or a beneficiary. Primary Owner means you with a second owner. Beneficiary means you with a beneficiary. If you choose Primary Owner or Beneficiary, enter yourself as the First-Named Registrant and the second owner or the beneficiary as the Second-Named Registrant.
The new combination will be added to your list of registrations. It’s not associated with any bonds yet. If you’d like to use this new registration for all new bonds you buy in the future, select it from the list and click on the “Preferred Registration” button.
Associate New Registration to Existing Bonds
Making a new registration your preferred registration only affects the default for new bonds you buy in the future. To change the registration on your existing bonds, click on “Edit a registration” under ManageDirect.
Scroll down to the bottom and select Series I Savings Bond.
You will see a list of your I Bonds. Check the box for the ones you’d like to change. Or check all of them if you’d like to change the registration for all existing bonds.
Choose your desired registration in the dropdown. The bonds you selected will change to this new registration after you click on Submit. As long as you’re still the primary owner, changing the registration doesn’t trigger taxes.
Grant Transact or View Rights
If you granted Transact or View rights to the previous second owner or beneficiary, those rights will be canceled automatically after you change the registration. You’ll need to grant Transact or View rights to your new second owner or beneficiary if you’d like. For more on why you may want to grant Transact or View rights and a walkthrough of how to do it, please read How To Grant Transact or View Right on Your I Bonds.
Deposited Paper Bonds with Joint Ownership
If you have bonds in your account that originated from paper bonds you bought with your tax refund (see Overpay Your Taxes to Buy I Bonds and How To Deposit Paper I Bonds to TreasuryDirect Online Account), those bonds may have been issued to you and your spouse jointly (“you OR spouse”) when you filed a joint tax return.
This “OR” type of ownership is different than the “you WITH X” type of ownership in that the two owners are equal. There’s no primary owner or second owner in the “OR” type of ownership. One owner can’t kick out the other owner without the other owner’s consent. The “OR” ownership is preserved when paper bonds are deposited into the TreasuryDirect account. These bonds become “restricted securities” and you can’t change the registration on them.
If you don’t like this restriction, don’t use Box 4 on IRS Form 8888 when you buy I Bonds with your joint tax return. Use Line 5a and enter only one name. Alternate the owner between you and your spouse in different years.
You can change the registration and grant rights after you deposit the paper bonds with only one name. This way you can have the same registration for all the bonds in your account.
Say No To Management Fees
If you are paying an advisor a percentage of your assets, you are paying 5-10x too much. Learn how to find an independent advisor, pay for advice, and only the advice.