SAVINGS BONDS

The Bond Teller - An Online Resource for Employees of Financial Institutions

11/12/2002

Electronic Series I Savings Bonds Introduced

On October 15, the Treasury Department introduced a new way to buy United States Savings Bonds -- an electronic version of the inflation-indexed Series I Savings Bond. The electronic I Bond is part of a new system, TreasuryDirect, designed to offer investors a one-stop web location for buying and managing holdings of Treasury securities. This is the first time that the Treasury has offered a paperless, online version of a savings bond. Individuals must first open an online account at www.treasurydirect.gov before they can make a purchase. Purchases and redemptions are made via ACH debit and credit of a designated account at a financial institution.

The electronic I Bond supplements the traditional ways the public buys and redeems savings bonds. TreasuryDirect, for the first time, will allow I Bond purchasers to buy in increments of as little as a penny above the minimum purchase price of $25, up to the annual purchase limit of $30,000. The electronic I Bond earns interest exactly as does the paper security.

"This new way of buying, managing, and redeeming I Bonds is the first step in a larger initiative, TreasuryDirect, which creates a direct relationship between the U.S. Treasury and its customers," said Van Zeck, Commissioner of the Public Debt. "Eventually, we plan to make the full range of Treasury securities available online through TreasuryDirect, resulting in cost savings to taxpayers through improved efficiencies and lower transaction costs."

The new TreasuryDirect.gov website is a customer-focused and intuitive interactive tool. It provides investors with a safe and convenient way to learn about, buy, and manage their Treasury securities in a single account.

TreasuryDirect.gov will be expanded early next year to include additional information and options. Customers will continue to have easy access to the existing services used to purchase other Treasury securities including Treasury bills and notes.

Paper Series EE and I bonds remain available over-the-counter through financial institutions. Redemptions of paper savings bonds are handled by most commercial banks and thrift institutions, along with many credit unions.

The Bureau of the Public Debt will launch a comprehensive education campaign next year to inform the public about TreasuryDirect as a safe and secure way to buy and manage Treasury securities in a paper-free environment.