Savings Bonds Go High-Tech
By Dayana Yochim (TMF School)
June 13, 2003
Paper or plastic? It's a choice you're given every trip to the grocery store. And savings bond shoppers have for years enjoyed the option of paper or vapor. Starting in 2005, though, the Treasury Department will institute an electronic-only policy for savings bonds.
The Washington Post recently reported the U.S. Treasury's intent to end the sale of paper savings bonds -- including the popular I Bonds and Series EE Bonds -- by 2005. Investors with paper bonds stashed in their sock drawers will be encouraged to trade them in for e-versions. (I Bonds currently offer a pretty impressive interest rate of 4.66%, and series EE Bonds a not-too-shabby 2.66%.)
In addition to scrapping the paper versions, buyers will no longer be able to make their purchases via credit card, a move that will go into effect by the end of this year. You'll have to pay for savings bonds with money from your bank account.
If you're like many grandparents, this development may put a crimp in your birthday and graduation gift plans. A Treasury official told the Post that either minors will need to have bank accounts or donors will have to hold the bonds in their own accounts. And you won't be able to purchase savings bonds at local banks and credit unions.
Want to learn more about where to put your non-stock money? Then stop by our Short-Term Savings Center, which features some Fool-only rates on certificates of deposit and money markets.
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