NCPA - National Center for Policy Analysis

Future of Offering Paper Savings Bonds at Tax Time Is Uncertain

September 16, 2015

After the Treasury eliminated paper savings bonds, customers who want to buy savings bonds must use TreasuryDirect, an online platform that requires internet access and a bank account. The only exception is the Tax Time Savings Bond program which allows paper bond purchases.

However, the program's future is uncertain as the Treasury considers its cost versus the benefits it provides and defines a plan to roll out another plan to buy bonds through an electronic platform using a mobile device.

A study carried by the Government Accountability Office (GAO) found that access to paper bonds is important because in many cases it's the only way lower-income households can save.

  • U.S. savings bonds continue to provide Americans with an affordable, safe, and convenient way to save and invest.
  • When the Treasury ended the over-the-counter sale of paper savings bonds it created challenges for some bond buyers.
  • The Treasury needs to consider the costs of denying access to a segment of bond buyers if it decides to implement an exclusively internet-based system to purchase bonds and eliminate the current Tax Time program.
  • The GAO recommends that the Secretary of the Treasury consider the benefits and costs of the Tax Time program in future decisions on whether to extend the program.

The study also acknowledges the importance of saving and the limited savings of lower-income households and thus, discusses other asset-building programs for various purposes that are being promoted by State, local and nonprofit agencies.

The report emphasizes that programs should be developed to help lower-income households build assets through the use of individual development accounts or child development accounts.

Source: Richard Tsuhara et al., "Future of Offering Paper Savings Bonds at Tax Time Is Uncertain," Government Accountability Office, July 2015.


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