Treasury Moving to Electronic Payroll Savings Bonds
The agency is encouraging federal workers who would like to continue saving through payroll to open a TreasuryDirect account at www.treasurydirect.gov to avoid a lapse in their savings plan.
Defense Finance and Accounting Service, which processes payroll primarily for the military, stopped savings bond allotments on July 31, 2010, for military personnel and retirees, and August 29, 2010, for civilian employees. Treasury has set January 1, 2011, as the deadline to end the sale of paper payroll savings bonds for non-federal employees.
According to a press release, payroll participants can purchase electronic savings bonds and other Treasury securities such as bills, notes, bonds, and TIPS (Treasury Inflation-Protected Securities) using TreasuryDirect, a secure, Web-based system provided by Treasury’s Bureau of the Public Debt. The system is available 24/7, and opening an account is free.
Once an account is opened, an employee can contact his or her payroll office to submit a direct deposit request. With a TreasuryDirect account, an employee has the option of buying Treasury securities through payroll savings or by using a checking or savings account.
The move is part of a larger “go green, save green” initiative to increase the number of electronic transactions and save taxpayer dollars. The announcement said the initiative is expected to save $400 million in its first five years, of which $50 million is attributable to the elimination of paper payroll bonds.