Uncle Sam goes paperless

U.S. Savings Bonds, which kids have received as birthday and holiday gifts since 1935, have become the latest victim of the digital age.

The Treasury Department is now issuing the bonds in electronic form only, hoping to save an estimated $120 million over five years by eliminating printing, mailing, storage and processing fees.

Through the Treasury’s Smart-Exchange program, bondholders can convert their paper E, EE or I bonds into electronic securities at TreasuryDirect, a website that gives users around-the-clock account access as well as the ability to redeem securities and deposit balances directly into bank accounts. Unlike paper bonds that were issued only in specific denominations, electronic bonds may be purchased at any value between $25 and $5,000.

“Electronic bonds not only cut costs on paper, they also eradicate the possibility of misplacing or destroying your bond, which when it comes to paper bonds is always a possibility,” said Joyce Harris, spokesman for the Bureau of the Public Debt.

Sales of U.S. Savings Bonds have fallen by 78% over the past decade, she added.

Paltry returns may be the reason. Series EE Bonds issued after November earn a 0.6% fixed rate of interest. According to Bankrate.com, banks are offering certificates of deposit and money market rates that are barely better and sometime worse.