The Treasury Department has stopped selling paper U.S. savings bonds at banks, ending a tradition stretching back to 1935.
The action was originally announced back in July and is estimated to save taxpayers approximately $120 million in the next five years as part of an effort to increase the number of electronic transactions with citizens and businesses. Sales of paper savings bonds ended on January 1. Instead of selling the savings bonds on paper, the Treasury will instead sell electronic versions of Series EE and I will through purchase TreasuryDirect, a Web-based system operated by the Bureau of Public Debt, where investors have been purchasing savings bonds online since 2002.
Ending over-the-counter sales of paper savings bonds at financial institutions is part of the Treasury’s all-electronic initiative announced in April 2010. As part of the initiative, Treasury stopped the sale of paper bonds through traditional payroll plans, effective Dec. 31, 2010. It is estimated that ending the sales of paper payroll and new issues of OTC bonds will save a total of $120 million over the next five years in areas such as printing, mailing, storing bond stock and fees paid to financial institutions for processing bond applications.
Instead, investors are encouraged to open a free TreasuryDirect account. Once it’s established, investors can buy, manage, and redeem Series EE and I electronic savings bonds; convert Series EE and I paper savings bonds to electronic through the SmartExchange feature; purchase electronic savings bonds as a gift; enroll in a payroll savings plan for purchasing electronic bonds; and invest in other Treasury securities such as bills, notes, bonds, and TIPS (Treasury Inflation-Protected Securities).
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