If we had a drawing (open to customers and noncustomers) for a $100 savings bond would there be any issues with purchasing a $100 bond for $50? What about if we wanted to give an I Bond which we would have to purchase for $100.

You do not have to worry about filing a 1099 unless you give away an item over $600.

The only other concern would be checking your state laws on sweepstakes and contests. Some states have a minimum age for participants.

It couldn't be considered deceptive if you say you're giving a $100 bond but you bought it for $50 and it won't be worth that until it hits maturity?

A consumer may not understand that but a regulator would. It's not like you're saying $100 cash and only giving $50. I can't imagine you been accused of deceptive advertising for that, but of course all this is just my personal opinion.

Not that this makes it right, but I think all banks do it all the time. If you feel the need, you might just put something in the fine print about full value will be reached after 7 years maturity.