Area bank patrons have been used to walking up to a teller to purchase U.S. Savings Bonds, a secure staple of small investors and gift givers for more than 75 years.
That option ended Jan. 1 when the U.S. Treasury Department switched to selling savings bonds exclusively through their website, TreasuryDirect.gov.
The impact on local banks is limited to the elimination of a service they provided to customers, Tampa State Bank Vice President Kevin Fruechting said.
“We used to sell quite a few savings bonds,” Fruechting said. “The effect on us is minimal in that we didn’t have any direct benefit from it, other than customer contact. We didn’t make anything off of them.”
Customers who haven’t developed skills using the Internet, particularly the elderly, are the ones most inconvenienced by the online purchasing system, Fruechting said.
“Where we’re seeing the most consternation is senior citizens that aren’t as computer savvy,” Frueching said. “Their eyes kind of glass over.”
Peabody State Bank Operations Officer Dennis Riggs voiced a similar concern.
“There are some elderly that don’t do the Internet,” Riggs said. “Other than them finding a relative or friend to help them through that process, it’s not a process we want to take time in the teller line to do, because it takes more than a few minutes.”
As savings bond interest rates have declined, so have overall sales. In 2001, sales of U.S. Savings Bonds totaled $11.6 billion. By 2009, sales had declined to $2.9 billion.
The decreasing popularity of savings bonds may be one reason Hillsboro State Bank Senior Vice president Dawn Helmer hasn’t heard any objections from her customers to the new sales arrangement.
‘We haven’t been selling as many. it’s not as big an item anymore, it seems,” Helmer said. “I don’t think we’ve had any comments.”
Individuals who want to purchase savings bonds must create a personal account online with TreasuryDirect.gov. Investments in savings bonds, as well as other Treasury Department investment vehicles, can be monitored and managed through this account.
TreasuryDirect.gov also provides a no-cost process for converting existing paper bonds to electronic bonds, allowing them to be included in a personal account.
Giving bonds as gifts now requires an additional step, as the Treasury Department no longer issues paper copies for new bonds.
The giver purchases a bond online through their account. The recipient must open a separate personal account with TreasuryDirect, and once it is established the gift bond is electronically transferred.
Paper bonds are still redeemable at most banks. All three bank representatives above said their institutions will continue to cash savings bonds.
Complete instructions and tutorials on how to sign up for savings bond purchases are available at http://www.treasurydirect.gov.