Treasury Direct (U. S. Savings Bonds)

TreasuryDirect lets you buy and redeem securities, including savings bonds,  directly from the U.S. Department of the Treasury in paperless electronic form.  In order to participate in payroll deductions for TreasuryDirect, participants need to open a TreasuryDirect account.  Once your account is established you can then use the University of Iowa Employee Self Service to establish your monthly payroll deduction in any amount you choose.

Frequently Asked Questions

Yes, but you must have an established TreasuryDirect account already set up in order initiate payroll deductions.  Payroll deductions are initiated on the UI Employee Self Service site and transmitted to your TreasuryDirect account after every monthly payday.

No. Bonds are purchased with "after tax" funds. The earnings on bonds can be deferred until they are cashed.

$25 for both EE and I bonds when bonds are purchased electronically.

No. You can have as little as $1 deducted each month for the purchase of a bond. All electronic savings bonds are sold at face value.

EE Bonds earn a fixed rate of interest. Interest rates on new issues are determined on May 1 and November 1. Rates are based on 10 year Treasury Note yields.

I Bonds earn interest from a combination of a fixed rate of return and a semiannual inflation rate.  Fixed rates are determined on May 1 and November 1 and last for 30 years.  The inflation rate is also determined on May 1 and November 1 and is based on the Consumer Price Index.

Series I Bonds earn interest until they reach final maturity at 30 years from the issue date.  The interest rate is a combination of a fixed rate and a semiannual inflation rate.

Series EE Savings Bonds purchased after May 2005 will earn a fixed rate of interest set at the time of purchase.  The U.S. Treasury guarantees EE bonds will double in value after 20 years.  EE bonds with issue dates prior to May 1, 2005 will continue to earn interest according to the terms that were in effect when they were issued.

If you cash a bond before 5 years, you forfeit the 3 most recent months of interest on the bond.  Effective February 1, 2003, bonds purchased can be cashed only after 12 months from their issue date.

Paper bonds can be taken to a bank or credit union to find the current value. You can also go to the www.treasurydirect.gov web site and  search for  "Savings Bond Calculator."  Electronic bond values can be found by logging into your TreasuryDirect account and clicking the “Current Holdings” tab.

A beneficiary can cash a bond only if the owner is deceased. A co-owner can cash a bond without the knowledge or consent of the other co-owner. Bonds can only have one (1) beneficiary.

Yes. Bonds can be purchased in the name of another person (grandchild, son, daughter, etc).  Information can be found under the “Savings Bonds as gifts” link on the TreasuryDirect site.

Yes. Earnings on bonds are subject to federal taxes but are exempt from state and local taxes.

Yes. The earnings on bonds can be exempt from all taxes if they are used to pay for qualified educational expenses, are registered in the name of an owner or co-owner who is at least 24 years of age, and whose modified adjusted gross income is under a figure adjusted each year (refer to a bank or the www.treasurydirect.gov web site). The child cannot be the owner of the bond for this exemption. The child can be the beneficiary.

Paper bonds can be cashed at any of 40,000 banks and credit unions nationwide.  Electronic bonds are redeemed through your TreasuryDirect account.

The Bureau of the Public Debt is authorized to replace lost, stolen, or destroyed savings bonds.  You can file a claim by completing Form PD F 1048 (pdf).