The Bond Teller - Treasury to Stop Issuing HH Bonds in August 2004
The Treasury Department's Bureau of the Public Debt has announced that Series HH Savings Bonds would no longer be offered to the public after August 31, 2004. HH bonds issued through August 2004 will continue to earn interest until they reach final maturity 20 years after issue. HH bonds, issued since 1980, are available in exchange for Series E or EE bonds.
HH bonds are current-income securities that pay interest to their owners semiannually. The current annual interest rate paid on new HH bonds, or HH bonds entering a 10-year extended maturity period, is 1.5%. There are $13.3 billion worth of Series HH bonds outstanding.
The Treasury is withdrawing the offering due to the high cost of exchanges in relation to the relatively small volume of transactions. After the HH offering is withdrawn, holders of eligible E and/or EE bonds may choose to invest the proceeds of maturing issues in marketable Treasury bills or notes at auction, or new Series EE or I savings bonds.
Owners of Series E or EE bonds wanting to complete an exchange prior to the withdrawal date should complete a Form PD F 3253, "Exchange Application for U.S. Savings Bonds of Series HH," and submit it with the bonds being exchanged to a qualified savings bonds agent. Financial institutions that serve as agents are able to help customers fill out the application form and forward appropriate materials to a Federal Reserve processing site or the Bureau of the Public Debt. The E/EE bonds being exchanged must have a minimum redemption value at the time of the exchange of $500; there is no maximum. More information about Series HH bonds and the exchange transaction can be found on the Bureau's website, www.treasurydirect.gov. Agents will also be receiving instructions and helpful information for customers from their servicing Federal Reserve Banks.
TreasuryDirect offers Series EE and I savings bonds only in electronic form (that is, no paper bonds are issued), with purchases and redemptions made through electronic payments to or from a checking or savings account designated by the account holder. Investors can track and manage their holdings online - 24 hours a day, 7 days a week - from anywhere they have Internet access. Since the launching of TreasuryDirect, investors have opened more than 150,000 accounts and now hold approximately $875 million worth of electronic securities.