Series I Savings Bonds for 501(c)3 organizations?

[redgleek]

TLDR: Is it possible for a 501(c)3 to purchase Series I bonds and what organization type should we use.

Treasury Direct Account Creation Options

I’m on the board of a non-profit benefiting our local public school. We are fortunate to have build a small reserve fund and would like to start earning interest on it to help offset inflation (short term) and some of the annual amount we need to raise (long term) (currently earning 0 at a bank savings account).

We learned about Series I bonds from Reddit. I read on their website that entities can also hold these bonds with a TIN (which we have). However, when we went to sign up, the options under “Business or Organization” didn’t seem like a good fit.

We were wondering if anyone here had experience setting up a Treasury Direct account for a 501(c)3 organization and could suggest what the right option would be to signup under (or how to figure out what the right option is).

Separately, we’d welcome any other no-risk options for investing our reserve! Thank you!

Edit: found this FAQ about Entity Accounts. Have not heard back from the email I sent.

 

[juns]

@redgleek I doubt it, but I don't know all the base entity types which can obtain 501c3 status. Series I savings bonds generally require ownership by natural person individual or connection to natural person individual (e.g. grantor trust).

See 31 CFR §360.6 for Series I bond authorized forms of registration.

https://www.ecfr.gov/current/title-31/subtitle-B/chapter-II/subchapter-A/part-360

If you want to be sure, e-mail Treasury Direct about it.

Edit: Above link is for paper bonds. I don't know if electronic bonds have special allowances. I still doubt it because it would be too easy for people to get around annual purchase limits.

 

[redgleek]

@juns Thanks! I’ve emailed their support line — waiting on a response.

 

[myronwhite]

@redgleek You most likely will have to buy TIPs directly from Treasury. Savings Bonds are only to be bought by people, as in natural people, not legal entities.

Do you have an accountant? You really need one to help you navigate this and other accounting issues. You may be able to get one to donate their services. Make sure they are a CPA. While you are at it, make sure you also have an attorney. You likely can get one to donate their services as well.

Both may donate their services in exchange for a mention in the monthly newsletter or other recognition. They may do it and not want recognition.

 

[redgleek]

@myronwhite Thanks for your repones! There is a section for entities to purchase them (see link in the post), such as LLCs and Corporations. It’s just that our 501(c)3 doesn’t fall into one of those buckets.

 

[redgleek]

Thanks in advance for your help and suggestions!

 

[fromsalemwithlove]

@redgleek For tax payers. Quite sure. The interest rate stays just so long. Goldman Sachs offers a CD paying above bank rates.

 

[fire_starter]

@redgleek From here under who can own an I bond

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm

Basically only individual, estates and possibly trusts

 

[redgleek]

@fire_starter I think that’s for the paper bonds. The website formatting is horrible but the way I’m reading it is e-bonds are possible but paper bonds are not.

Electronic bonds (in TreasuryDirect): Yes

Paper bonds:
Trusts and estates: In some cases, Yes
Corporations, partnerships, other entities: No

 

[segador]

@redgleek Thanks for bringing this question up. I'm with an organization that falls under a similar situation. Please let us know what their support line says!