Dear Dr. Don,
I have seen discussions in other forums about putting Roth IRA money in government Series I savings bonds, but I cannot find any way to actually do this. The TreasuryDirect Web site does not mention this possibility.
I went to my local bank and they could sell me a Series I savings bond, but they said they couldn’t register it as a Roth IRA. They referred me to their investment section, and they couldn’t help me either.
Is it possible to buy Series I bonds and have them held in a Roth IRA? If the answer is yes, can you be specific about how to do this? I’m not finding any help anywhere.
— Nancy Newly
The U.S. Treasury doesn’t want to get into the custody business for IRA and Roth IRA accounts so it doesn’t offer that option for individuals with TreasuryDirect accounts. That doesn’t mean that you can’t hold savings bonds in an IRA or Roth IRA account — you just have to be a little more creative.
I wrote about this topic in an earlier Dr. Don column, “Tough to buy Series I bonds for IRA.” The issues are similar to those faced by individuals who want to hold real estate in their IRA or Roth IRA accounts. It’s not impossible, but you have to decide if the cost and hassle are worth it to you.
Still, a self-directed IRA or Roth IRA account is available. An Internet search on “self-directed IRA” will give you some choices.
I’ll argue that you can do nearly as well or better by investing in Treasury inflation-protected securities, or TIPS, by holding the TIPS in a Roth IRA with a brokerage account, investing in a mutual fund that invests in these securities or buying an exchange-traded fund that invests in these securities.