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More Reasons To Skip Savings Bonds!

November 9, 2010

The U.S. Treasury is wielding both a carrot and a stick to persuade savers to switch from U.S. savings bonds to T-bills, notes and bonds. The Treasury lowered the minimum purchase for T-bills to $100 while capping the amount of savings bonds you can buy in a single year at $5,000.Tresury bond poster

Savings bonds have faded in popularity. In the government’s 1999 fiscal year, savers purchased more than 49 million bonds for $4.7 billion. They bought 17.6 million bonds for $2 billion in fiscal 2010. As of January 1, you won’t be able to buy paper savings bonds through payroll deduction; the option ended for federal workers and military personnel in September. You can still have money deducted from your paychecks for savings bonds, but only by signing up for a free online account at  and arranging an automatic debit.

Paper bonds are still available to give as gifts. Go to your local bank, where you’ll pay half the face value – say, $25 for a bond that will be worth $50 when it matures. Or buy gifts online once you have a Treasury Direct account. When you buy online you pay the face value, and the bonds earn interest until maturity. The recipient must also have a Treasury Direct account.

The decline in popularity of savings bonds isn’t surprising given their low rates. If you need help in deciding what to do, contact GAI ( so we can give you the up-to-date info you need to make smart decisions. Call us at 212-979-6830 today. See you soon!


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