Opening an account at TreasuryDirect to buy I Bonds is an easy process for most people. It takes less than 15 minutes (see How to Buy I Bonds). However, a small percentage of people run into an issue with ID verification. They are asked by TreasuryDirect to get a signature guarantee on a paper form FS 5444.
TreasuryDirect uses an automated third-party service to run ID verification. Many other financial institutions do the same for opening accounts online. Your account is kicked off to an exception process when the automated service says they can’t verify your identity based on the given information. When this happens at other financial institutions, they may ask you to upload pictures of your driver’s license or show up with your ID at a physical branch. Because TreasuryDirect doesn’t have any physical branch, they ask you to get a signature guarantee on a paper form and mail it to them.
Unrelated to Credit Freeze
Failing ID verification isn’t caused by having a credit freeze. You can still pass with a credit freeze in place. You don’t need to unfreeze your credit before you open an account with TreasuryDirect.
It has more to do with matching your name, date of birth, Social Security Number, driver’s license number, address, and phone number. If you moved recently, the ID verification service may fail you because they don’t have the updated information yet. Or perhaps the ID verification service simply doesn’t have all the information for everyone. It’ll return a failure when it can’t match the information.
It’s not your fault. The automated ID verification service just isn’t 100% reliable. You’ll have some extra work if you’re unlucky.
Required for Changing Bank Account
TreasuryDirect also requires a signature guarantee on Form FS 5512 when you want to change the bank account linked to your account. This is why you should choose a bank account that you intend to use for a long time when you open your TreasuryDirect account. Changing it down the road will require more work.
Once you have the account set up and the bank account linked, buying more I Bonds or cashing out won’t require a signature guarantee again.
You need the signature guarantee from a “certifying officer.” This officer can be someone at a bank, a credit union, or a brokerage firm. You sign in front of the officer. The officer signs the form after verifying your ID.
If you need a signature guarantee because you’re changing the linked bank account, the certifying officer doesn’t have to be from the same bank. The form from TreasuryDirect says a notary public isn’t an acceptable certifying officer.
You don’t need to go to a place where you have an account, although being a customer certainly helps. They’re only doing you a favor because TreasuryDirect isn’t paying them and they have no obligation to do it. It’s easy for them to say no for fear of liability or simply because they haven’t seen it before.
If you go to a bank or a credit union, talk to someone working at a desk, not a teller. The teller may not be familiar with it. Try to catch someone more experienced who may have done it before. Ask nicely. If you get a “no” from someone, try a different branch or go to a different bank. Try a credit union or a small community bank, which may be more community-minded and willing to go the extra mile.
When I needed it, I made an appointment at a Bank of America branch and they did it for me.
Not a Medallion Signature Guarantee
TreasuryDirect asks for a signature guarantee, not necessarily a medallion signature guarantee. A medallion signature guarantee is one form of acceptable signature guarantee but it’s not the only one.
A medallion signature guarantee is a program of the securities industry. It’s used more for transferring brokerage accounts. If your broker has a physical branch near you, you can try there but many brokers only give medallion signature guarantees when it involves their own accounts. They don’t do it for outside accounts. If you have large accounts at the broker, they may agree to make an exception.
Many banks and credit unions don’t give medallion signature guarantees but the [normal] signature guarantees they give for signing checks will work for TreasuryDirect. So don’t start your conversation at a bank or a credit union by asking for a medallion signature guarantee. Simply say you need a signature guarantee.
Notarize with a Note
If you have a really hard time finding someone at a bank, a credit union, or a broker to give you the signature guarantee, some people reported that TreasuryDirect accepted the form with a notary stamp when they attached a note saying they couldn’t get any certifying officer to sign the form.
It’s not guaranteed this will always work but it’s worth trying as a last resort when you’re denied by the local institutions.
Mail and Wait
If you succeed in getting a signature guarantee from someone willing to accommodate, now you mail it to the address on the form and wait. It may take 2-3 weeks for TreasuryDirect to complete the process. You’ll receive an email when it’s done.
I had to do this recently for changing the linked bank account. I mailed the form on December 20th. It was processed on January 4th. The turnaround time isn’t too bad, considering the mailing time, the holidays, and the flurries of activities at the end of the year. Just have some patience and let the process run its course.
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