Starting Jan. 1, paper savings bonds will no longer be available for purchase, according to a recent announcement from the Treasury Department’s Bureau of Public Debt. In what is known as an “all-electronic initiative,” the government is making an attempt to reduce costs by switching to a digital format.
Paper Savings Bonds End in 2012
If you have an affinity for paper savings bonds—or are simply a collector at heart—now is the time to get your hands on the last bonds to be offered before the government switches to an all-electronic format.
For some time, the government has pushed to move to a digital-only format in various departments. In May of this year, the Social Security Department phased out paper benefits checks, requiring that all recipients have their funds directly deposited into bank accounts or deposited onto a prepaid debit card.
Now, the U.S. Treasury is taking the same route in order to eliminate costs associated with printing, mailing storage and fees paid to all of the financial institutions that process bond applications. This digital switch alone is expected to save $120 million over the next five years.
U.S. Treasury Selling Savings Bonds Online
Those who are interested in buying savings bonds starting next year will need to set up an online account with the U.S. Treasury Department through TreasuryDirect, a free online bond-buying portal that has been available since 2002.
If you want to give a bond to another person, they will also need to set up an account so that you can transmit the bond to them electronically. Also, the department noted that if you want to buy paper savings bonds online for a person under the age of 18, a parent or guardian must open the account.
However, there is one exception to the rule. You will be able to purchase paper Series I Savings Bonds in 2012 by using your tax refund, according to the department, though no one is sure how long this option will be available.
For individuals who currently carry paper savings bonds, they can still be redeemed at their financial institutions. Paper bonds that haven’t reached their maturity date and have been lost, destroyed or stolen may be converted to the digital form.