About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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NYT Op-Ed: Save the Savings Bond


NYT Op-Ed: Save the Savings Bond

As readers who have been investing in savings bonds over the last 10 years know, the Treasury has a long record of making savings bonds less attractive. The latest change is the ending of the paper savings bonds which the Treasury announced in July. Except for tax refunds, savings bonds will only be available online through Treasury Direct. People will no longer be able to buy savings bonds at their banks.

We're not the only ones noticing how the Treasury has been hurting the savings bond program. This New York Times Op-Ed article points out these unfortunate changes:

The decision to eliminate the sale of paper bonds at banks is only the latest of several actions that have blunted the impact of these positive developments. The federal government has for years done little to support the savings bond program — eliminating its marketing budget, ending a program that allowed employees to buy savings bonds through payroll deduction, lowering annual purchase limits and making savings bond terms less favorable for small investors.

The Op-Ed asks the Treasury to reverse its decision to end paper savings bond. It also offers some other interesting ways to make savings bonds more accessible such as making them like gift cards that can be purchased at stores.

It's nice to see an Op-Ed on the side of savers. It's just one of the areas where we need Save Our Savers advocates.

Even with a fixed rate of zero percent, Series I Savings Bond is currently a good short-term deal, and based on the inflation numbers, it may even be a better deal. We'll know more in October. I have more details about this in my May I Bond review.


Bancxman   |     |   Comment #2
I always felt that the tax free accrual of interest made savings bonds the equivalent of a working man's 401(k). Congress has attacked this feature, so there may soon be even less incentive to buy bonds. I also suspect that Treasury would prefer to focus on auctioning off large dollar Treasury securities rather than having to tolerate the hassle of tracking millions of small savings bond purchases.
stormdog123   |     |   Comment #3
It has the tax free accrual of interest plus there is no state income tax on the interest.
Anonymous   |     |   Comment #5
The interest accrual is not (federally) tax free.  It is tax deferred.
LisaPA   |     |   Comment #6
You've really gotta lay off the inflation talk. Inflation hawks have literally been predicting hyper inflation for years, and the fact that they keep being wrong should be a clue that it's not gonna happen. Telling people to buy 0% fixed rate inflation-protected bonds is insanely bad advice. This economy is nothing like the 70s. We're in for a 90s Japan-style decade.

Anonymous   |     |   Comment #8
It really is sad when Savings Bonds which used to be the dregs as far as savings products offerings were concerned are now more attractive than other options.
Anonymous   |     |   Comment #9
In response to LisaPA #6.  The I savings bond is almost guaranteed to earn 3% over the next 12 months, if it is such a bad deal show me another guaranteed invest with a higher return over the next 12 months.
Saver   |     |   Comment #10
Today I went to my local bank to buy paper savings bonds.  I was told that the bank had stopped selling paper bonds as of August 19.  I protested saying that banks do not have to stop selling paper bonds until January 1, 2012.  The representative pointed to an annoucement which verified the January 1 date, but which also said that in the case of this particular bank, it would not sell bonds after the earlier date.  I asked the representative why the bank would stop providing this service to its customers before it was required to do so.  The only answer he could give me is that the bank was helping the US government in its reduction of paper work!  Fortunately, I was able to buy the bonds at a nearby bank although I had to carry $10K in cash to purchase them since the bank would not accept a personal or cashier check.  I want to warn other people on this site in case this should become a prevalent problem.  Has anyone else encountered this problem?