Important Changes to US Savings Bonds Program
November 23, 2011
The U.S. Department of the Treasury is ending sales of paper savings bonds at all financial institutions on December 31, 2011. This includes State Bank of New Prague. This change is expected to save taxpayers an estimated $70 million over the next five years, but it will require future buyers of savings bonds to make their purchases in a different way.
Here are answers to some of your questions.
Q: Are savings bonds going away?
A: No. Beginning in 2012, Paper Series EE and I Savings Bonds will no longer be sold through financial institutions or mail-in orders. But, savings bonds may be purchased online through TreasuryDirect. You may open a free TreasuryDirect account at www.treasurydirect.gov.
Q: Does this change end all sales of paper bonds?
A: Yes, with the exception of the Tax Time Bond Program introduced in 2010. Tax filers can purchase paper Series I Savings Bonds with their Federal tax refunds. Otherwise, there will be no other way to buy paper savings bonds.
Q: I already have paper savings bonds. What will happen to them?
A: Existing paper savings bonds are valid issues of the Treasury Department and will earn interest for 30 years from the issue date or until redeemed. You can still redeem paper bonds at State Bank of New Prague. You also can convert your paper savings bonds to electronic savings bonds in TreasuryDirect using a program called SmartExchange. There is no charge to convert paper bonds. No earned interest
will be lost, and the bonds will keep their original issue dates and current interest rate terms.
Q: I’ve been buying paper bonds to pay future college expenses. Can I still do so?
A: While paper savings bonds no longer will be available, the same education tax benefit and rules apply to electronic savings bonds in TreasuryDirect.
Q: I like to give savings bonds as gifts. Can I still do so?
A: Yes. You can buy electronic savings bonds as gifts in TreasuryDirect. You can hold the bonds in your gift box area in TreasuryDirect until you’re ready to electronically deliver them to the gift recipient. The recipient must have a TreasuryDirect account (or be named on a minor linked account if under 18 years old.)
Q: What is TreasuryDirect?
A: TreasuryDirect is a secure web-based system through which you can establish accounts to purchase, hold, and manage Treasury securities online, anytime. In TreasuryDirect, you can purchase Series EE and I Savings Bonds, Treasury bills, notes, bonds and TIPS (Treasury Inflation-Protected Securities).
Q: How do I sign up for a TreasuryDirect account?
Q: Is the TreasuryDirect website safe and secure?
Yes. The infrastructure TreasuryDirect resides on is well protected and the TreasuryDirect system uses several features to ensure the safety of the information you provide and the transactions you perform. To learn more about electronic savings bonds, Treasury securities, or TreasuryDirect just visit www.treasurydirect.gov for more information.