Treasury to End Sale of Paper Payroll U.S. Savings Bonds; Savers Have Electronic Option through TreasuryDirect
FOR RELEASE AT 10:00 AM
July 29, 2010
The U.S. Department of the Treasury is ending the sale of paper U.S. Savings Bonds through employer-sponsored payroll plans, effective September 30, 2010, for federal employees. The agency is encouraging federal workers who would like to continue saving through payroll to open a TreasuryDirect account at www.treasurydirect.gov to avoid a lapse in their savings plan.
Payroll participants can purchase electronic savings bonds and other Treasury securities such as bills, notes, bonds, and TIPS (Treasury Inflation-Protected Securities) using TreasuryDirect, a secure, web-based system provided by Treasury's Bureau of the Public Debt. The system is available 24/7, and opening an account is free. Once an account is opened, an employee can contact his or her payroll office to submit a direct deposit request. With a TreasuryDirect account, an employee has the option of buying Treasury securities through payroll savings or by using a checking or savings account.
"TreasuryDirect is a safe and convenient way for payroll participants to continue saving," said Public Debt Commissioner Van Zeck. "They can buy, manage and redeem their savings bonds all in one place without the fear of losing or misplacing their paper bonds."
Treasury announced in April that it would stop issuing paper payroll savings bonds as part of a larger "go green, save green" initiative. The agency’s long-term objective is to increase the number of electronic transactions and save taxpayer dollars. The initiative is expected to save $400 million in its first five years, of which $50 million is attributable to the elimination of paper payroll bonds.
To prepare for the change, some federal agency payroll processors are setting earlier deadlines to stop processing payroll allotments for savings bonds. Payroll participants should check with their employer or payroll provider to verify their agency’s deadline. Defense Finance and Accounting Service, which processes payroll primarily for the military, will stop savings bond allotments on July 31, 2010, for military personnel and retirees, and August 29, 2010, for civilian employees.
Treasury has set January 1, 2011, as the deadline to end the sale of paper payroll savings bonds for non-federal employees.
For more information about the elimination of paper payroll savings bonds and how to enroll in TreasuryDirect, visit www.treasurydirect.gov.