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Savings Bond Purchase FAQs

Frequently Asked Questions

What has changed?
The U.S. Department of the Treasury ended sales of paper Series EE and I savings bonds through over-the-counter channels (e.g., financial institutions and mail-in orders) as of Dec. 31, 2011. Savings bonds will remain available for purchase as electronic issues in TreasuryDirect. A new U.S. Treasury website.
Why is Treasury ending sales of paper savings bonds?
Ending sales of paper savings bonds is a continuation of the Treasury Department’s “all-electronic” effort announced in April 2010. The initiative will increase electronic transactions to reduce costs and enhance customer service. Ending sales of paper bonds will save an estimated $70 million over the next five years. Technology makes it possible for us to sell and maintain savings bonds and other Treasury securities electronically in TreasuryDirect at a reduced expense to taxpayers.
Does this change end all sales of paper bonds?
When the Treasury Department stopped selling paper savings bonds, it effectively end the paper savings bond program, with one exception. In 2010 a new Tax Time Bond Program was introduced making it possible for tax filers to purchase paper Series I savings bonds with their tax refunds. That purchase option will remain available. Visit TreasuryDirect for details.
What happens to the previously issued paper bonds?
They are valid issues of the U.S. Treasury and will earn interest for 30 years or until redeemed. Paper bonds can be converted to electronic savings bonds in TreasuryDirect using a program called SmartExchange®. There’s no charge to convert paper bonds. They won’t lose any of the interest earned, and they retain their original issue dates and interest rate terms.
What about people who’ve been buying paper bonds to pay future college expenses?
Paper savings bonds will no longer be available; however, the same education tax exclusion rules apply to electronic savings bonds in TreasuryDirect.
What about Customers who like to give savings bonds as gifts?
TreasuryDirect has a gift feature so customers can buy electronic savings bonds as gifts. The recipient of the gift must have a TreasuryDirect account (or be named on a minor linked account if under 18 years old) to receive the gift. Customers can hold bonds in their Gift Box area in TreasuryDirect until the bonds are electronically delivered.
Cornerstone Credit Union
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