Who would have thought that Mom, Pop, Grandpa and Grandma would no longer be able to buy paper EE savings bonds and give them as gifts to the young’ens?
Sad but true, the last of the paper savings bonds will be sold at financial institutions at year end, 2011. What will happen then? The new reality certainly isn’t what I would have chosen – beginning in 2012 series EE savings bonds will only be available for purchase through TreasuryDirect.
How all of this is going to unfold was unclear to me when I read the press report from TreasuryDirect.
What I envisioned was that TreasuryDirect would have a 3-step method: collect the same type of information that would previously have been given to the financial institution; receive money from a checking account to pay for the bonds; and finally, have a print option so that the customer could print a copy of the purchase to give to their recipient in lieu of a paper bond from the government.
After researching the TreasuryDirect website I learned that my “vision” was off base by a country mile.
The process of opening a TreasuryDirect account is not difficult; you must provide a Tax ID Number (SSN or EIN), an E-mail address, and a bank account and routing number. It is the purchase of an electronic gift savings bond that gets a bit complicated.
From the TreasuryDirect website:
To buy an electronic [gift] savings bond:
- You must already have a TreasuryDirect account.
- Use the Gift Box functionality to buy gift bonds.
- Keep them in your account until you’re ready to deliver them.
To give an electronic savings bond, you must know the recipient’s:
- Full name
- Social Security Number (SSN) and/or taxpayer ID number
- TreasuryDirect account number
When the bond is delivered to the recipient’s TreasuryDirect account, he or she will get an e-mail announcing your gift.
You must be 18 or older to create a TreasuryDirect account and to buy gift bonds. A child under 18 can get gift deliveries in a Minor linked account.
What that means for me
The four adults for whom I purchase gift savings bonds would each have to open a TreasuryDirect account, and the two minors on my gift list would each need a minor linked account. The adults and the young’ens would never get to see, touch, feel or smell a paper bond or bond facsimile as all monies would be held in the TreasuryDirect accounts until they are cashed. The reality is that these are no longer savings bonds per se, but rather just a different form of savings accounts.
With a current interest rate of 0.60% on series EE savings bonds, I have to ask myself if it is worth following all of those requirements just to continue the tradition of giving gift savings bonds even though I have done this for most of my adult life. I also wonder if other parents and grandparents will be asking the same question of themselves.
President Franklin D. Roosevelt bought the first savings bond on 5/01/41. I have a hunch that he would not be overly pleased about the changes that will soon take place and the possibility that Series EE savings bonds may be destined for extinction. Changes in life are inevitable, but some of them are more fruitful than others!
Sources:
Personal opinion
http://www.treasurydirect.gov/news/pressroom/pressroom_comotcend0711.htm
http://www.treasurydirect.gov/indiv/planning/plan_gifts.htm
http://www.treasurydirect.gov/news/pressroom/currenteebondratespr.htm
http://www.archive.org/details/1941-05-01_President_Buys_First_Bond
