The U.S. Treasury is offering a paperless version of its popular Series EE bonds through the government portal Treasury Direct. Until now, only the inflation-indexed Series I bond has been available in electronic form.
The paperless EE bond will differ slightly from the paper version, which continues to be available through financial institutions and payroll savings programs offered by thousands of employers. TreasuryDirect purchases can be made in increments of as little as a penny above the minimum purchase price of $25, up to an annual purchase limit of $30,000.
Interest is earned on the total amount invested, without reference to denominations, at 90 percent of the average return on five-year Treasury marketable securities for up to 30 years from issue date. The bonds currently carry 2.66 percent interest rate.
“This is an important step in our efforts to modernize the savings bond program through e-commerce,” said Peter R. Fisher, Treasury Under Secretary for Domestic Finance. “Our goal is to transform the savings bond program from one based on paper certificates to accounts accessed safely, and conveniently over the Internet.”
Treasurys long-range plan is to provide retail buyers of all Treasury securities the ability to manage their holdings online in a single account. System capabilities will gradually be expanded to add new products and features.
Over the next 18 months, ownership options will be expanded, account holders will be able to purchase EE and I bonds through payroll deduction and holders of paper securities will be able to deposit those bonds into their electronic accounts.
Eventually, marketable Treasury securities will be available through TreasuryDirect accounts.
Individuals opening TreasuryDirect accounts purchase and redeem bonds via electronic funds transfers through a customer-designated checking or savings account at a financial institution. Account holders also have the ability to track and manage their accounts on-line.
Paper EE bonds were first issued in 1980, and are the direct descendants of Series E bonds, which were first issued as Defense Bonds in May 1941. Series I bonds were first issued in September 1998.