1.8: Paper Savings Bonds

Position Treasury to eliminate new issues of paper savings bonds.

Other Information:

POSITION TREASURY TO ELIMINATE NEW ISSUES OF PAPER SAVINGS BONDS. Treasury is committed to offering savings bonds to the public, and our responsibility is to do so as efficiently as possible. Our strategy for accomplishing this centers on TreasuryDirect and electronic bonds, which are far more efficient to issue and service over the long term than paper savings bonds. Our success in encouraging customers to use TreasuryDirect to buy savings bonds will largely depend on their willingness to do business with us via the Internet. There are a number of steps we will take to enhance the attractiveness of TreasuryDirect and encourage a shift away from paper bonds, some of which are described below. To mitigate risks, both real and perceived, associated with online financial transactions, we continually seek ways to increase security. For example, we are distributing TreasuryDirect Access Cards to provide account holders a unique and more secure means of identifying themselves, in addition to normal password protection, each time they wish to access their accounts. Given the traditional appeal of savings bonds as gifts, we'll enhance TreasuryDirect to simplify the gift-giving process and eliminate the donor's need to know certain details about the recipient's account. Another strategic target is paper bonds issued through payroll savings plans. The process for an employee to direct payroll dollars to TreasuryDirect is simple and saves the employer substantial administrative costs. Familiarity with and access to the Internet should generally not be an issue for most employees. Together with the Federal Reserve, we'll work to transition payroll savings from paper to electronic securities. While our website remains our primary means of communicating with the public about buying and holding Treasury securities, we'll explore new avenues to promote TreasuryDirect. Outreach through other communication channels, such as financial literacy programs, will target customers not yet accustomed to conducting financial transactions online. While there has been no date set for withdrawing paper bonds from sale, the efforts that we are undertaking are designed to move increasing numbers of investors to TreasuryDirect as their preferred way of buying and holding savings bonds. We will also continue our efforts to encourage owners of outstanding paper bonds to convert their holdings to electronic form through TreasuryDirect. This conversion feature has proven to be quite popular and also contributes to the efficiency of the Retail program. We'll streamline our operations to make the conversion process even simpler for our customers.

Stakeholder(s):

• Retail Securities Services Program

Indicator(s):

Indicator:1

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