Learn More About Zero-Percent Certificate of Indebtedness
The Zero-Percent Certificate of Indebtedness (Zero-Percent C of I or simply, C of I) is a Treasury security that does not earn any interest. It is intended to be used as a source of funds for purchasing eligible interest-bearing securities.
There's no limit to the amount you may hold in your C of I. You may build the amount in your C of I a number of ways:
- Follow the Funding Options directions in ManageDirect® to schedule electronic deposits with your employer or financial institution. (See Learn more about the Payroll Savings Plan to purchase savings bonds using the Payroll Savings Plan.)
- Select "Zero-Percent C of I" as the Product Type in BuyDirect® to withdraw funds from a designated bank account (maximum of $1,000 per transaction).
- Redeem securities in your TreasuryDirect account to "Zero-Percent C of I" instead of a traditional bank account.
After you've accumulated enough for the security you wish to purchase, simply select "Zero-Percent C of I" as the Source of Funds in BuyDirect. For your convenience, daily incoming electronic deposits are applied toward your C of I immediately prior to issuing other securities in your account. As long as any deposits to C of I are received for the purchase request date and the balance is sufficient, your security will be issued as scheduled.
Debits to C of I will be processed daily in the following order:
- Reinvestments – If additional funds are required to complete a reinvestment transaction and the original security associated with the reinvestment was purchased with C of I funds on or after May 15, 2010, your C of I will be debited.
- Original marketable security purchases with C of I selected as the Source of Funds.
- Savings bond purchases with C of I selected as the Source of Funds.
Note: If your C of I balance is insufficient, scheduled transactions for which funds are not available will be canceled.
Need one less worry about your security payments? If payments to your bank are returned to us for any reason, the returned funds will be automatically deposited in your C of I. You're then able to use the deposited funds to purchase additional securities in your account or redeem all or part of them to your bank. It's your choice.
Unexpected changes in your plans? Choose the option to redeem your C of I, and the amount you enter is redeemed from your C of I and deposited into your designated bank account. However, if you purchase a C of I by debiting your financial institution, the total balance of your C of I will be ineligible for redemption for five business days. This is necessary in the event your C of I purchase request is returned to us by your financial institution. Five business days following receipt of the debit purchase, your funds are once again eligible for redemption.
All C of I purchase and redemption activity is conveniently recorded in your C of I History.