Although the current 2.2 percent interest rate on Series I savings bonds is appealing, purchasing the bonds has grown more difficult. Paper Series I and EE savings bondsthose handy envelope stuffer giftscan no longer be purchased in banks or credit unions; instead, you must purchase electronic bonds through TreasuryDirect, the Treasury Department’s Web-based system. Our correspondent discovered the procedure of purchasing a savings bond for her little nephew to be cumbersome. Here’s some assistance:
Do paper bonds still exist?
Paper savings bonds are no longer marketed by financial institutions as of January 1, 2012. Treasury’s goal of increasing the number of electronic transactions with citizens and businesses is being furthered by this measure.
SeriesEE savings bonds are low-risk savings instruments that yield interest until 30 years have passed or you cash them in, whichever comes first. EE bonds can only be purchased in electronic form through TreasuryDirect. Paper EE bonds are no longer available. You can buy, manage, and redeem EE bonds straight from your web browser if you have a TreasuryDirect account.
When did paper savings bonds stop being sold?
Purchase of paper savings bonds through payroll sales for government employees was stopped on September 30, 2010. With one exception, sales of over-the-counter (OTC) paper savings bonds halted on December 31, 2011, signaling the end of paper savings bonds.
What is the best way to obtain paper bonds?
How do I go about purchasing bonds? There are two options: Our online platform TreasuryDirect allows you to purchase them in electronic format. Using your federal income tax refund, purchase them in paper form.
Is it still possible to buy bonds at a bank?
Until they mature, Treasury bonds pay a fixed rate of interest every six months. They are available with a 20-year or 30-year term.
TreasuryDirect is where you may buy Treasury bonds from us. You can also acquire them via a bank or a broker. (In Legacy Treasury Direct, which is being phased out, we no longer sell bonds.)
After 30 years, what happens to EE bonds?
Interest is paid on EE bonds until they reach 30 years or you cash them in, whichever comes first. After a year, you can cash them in. However, if you cash them before the 5th year, you will forfeit the final three months’ interest.
Will savings bonds lose their value?
The most prevalent type, Series EE Bonds, were initially issued in 1980 and are still in use today. They were designed to pay interest for up to 30 years. 1 2 As a result, any bonds issued before 1989the first generationwill have stopped paying by the end of 2019.
July 13, 2011
WASHINGTON, D.C. Paper savings bonds will no longer be sold at financial institutions as of January 1, 2012, according to the Bureau of the Public Debt. This step, which supports the Treasury Department’s goal of increasing the number of electronic transactions with residents and businesses, will save taxpayers almost $70 million over the next five years.
However, savings bonds, which were first issued in 1935, are not going away anytime soon.
Electronic savings bonds in Series EE and I will continue to be available for purchase through TreasuryDirect, a secure, web-based system administered by Public Debt, where investors have been acquiring savings bonds since 2002, 24 hours a day, seven days a week.
“Savings bonds are an important part of this country’s history and culture, and they will continue to be an important part of America’s future in electronic form,” said Public Debt Commissioner Van Zeck. “It’s time to turn a 1935 model into a 21st-century investment tool,” says the author.
Treasury’s all-electronic program, launched in April 2010, includes ending over-the-counter (OTC) sales of paper savings bonds at financial institutions. Treasury stopped selling paper bonds through standard payroll plans on December 31, 2010, as part of the effort. Over the next five years, it is predicted that eliminating the sale of paper payroll and new issues of OTC bonds will save a total of $120 million in printing, mailing, bond stock storage, and costs paid to financial institutions for processing bondapplications.
Commissioner Zeck stated, “Through TreasuryDirect, investors have an easy and quick option to purchase and manage their bonds at no cost.”
“Paper savings bonds will never longer be misplaced, lost, or stored,” says the company.
Opening a TreasuryDirect account is free, and,once it’s set, investors can:
- Convert EE Series I also use the SmartExchange option to convert paper savings bonds to electronic savings bonds.
- Other Treasury securities, such as bills, notes, bonds, and TIPS, can be invested in (TreasuryInflation-Protected Securities).
Paper savings bonds can still be redeemed at financial institutions if you have them. Bonds that have not yet matured but have been misplaced, stolen, or destroyed can be reissued in either physical or electronic form.
Paper savings bonds in the Series I series are still available for purchase with a portion or all of one’s tax refund. Visit www.irs.gov for additional information on this feature.
What happens to savings bonds that aren’t claimed?
The majority of savings bonds have a 20- to 40-year original maturity. The Bureau does not notify bondholders when savings bonds reach their final maturity and stop earning interest. The Bureau has no active program to find bondholders and pay them the proceeds to which they are due for fully matured notes that have not been redeemed. The registered owner has traditionally been responsible for remembering to redeem the matured bond decades after the initial purchase. As a result, the US Treasury holds around $26 billion in matured savings bonds that have gone unclaimed.
EE bonds or I bonds: which is better?
According to the Treasury Department, if an I bond is used to pay for qualifying higher educational expenses in the same manner as EE bonds, the corresponding interest can be excluded from income. Interest rates and inflation rates have favored series I bonds over EE bonds since their introduction.