The Treasury Department has stopped selling paper U.S. savings bonds at banks, ending a tradition stretching back to 1935.

The action was originally announced back in July and is estimated to save taxpayers approximately $120 million in the next five years as part of an effort to increase the number of electronic transactions with citizens and businesses. Sales of paper savings bonds ended on January 1. Instead of selling the savings bonds on paper, the Treasury will instead sell electronic versions of Series EE and I will through purchase TreasuryDirect, a Web-based system operated by the Bureau of Public Debt, where investors have been purchasing savings bonds online since 2002.

Taxpayers can still opt to receive their tax refunds on paper Series I Savings Bonds. They only need to file Form 8888 with their tax returns.

“Savings bonds are very much a part of this country's history and culture, and will remain a part of America's future – but in electronic form,” said Public Debt Commissioner Van Zeck in a statement last July. “It’s time for us to take a 1935 model and make it a 21st century investment tool.”

Ending over-the-counter sales of paper savings bonds at financial institutions is part of the Treasury’s all-electronic initiative announced in April 2010. As part of the initiative, Treasury stopped the sale of paper bonds through traditional payroll plans, effective Dec. 31, 2010. It is estimated that ending the sales of paper payroll and new issues of OTC bonds will save a total of $120 million over the next five years in areas such as printing, mailing, storing bond stock and fees paid to financial institutions for processing bond applications.

Instead, investors are encouraged to open a free TreasuryDirect account. Once it’s established, investors can buy, manage, and redeem Series EE and I electronic savings bonds; convert Series EE and I paper savings bonds to electronic through the SmartExchange feature; purchase electronic savings bonds as a gift; enroll in a payroll savings plan for purchasing electronic bonds; and invest in other Treasury securities such as bills, notes, bonds, and TIPS (Treasury Inflation-Protected Securities).

Those currently holding paper savings bonds can continue to redeem them at financial institutions. Bonds, which have not matured, but were lost, stolen or destroyed, can be reissued in paper or electronic form.
To commemorate the history of savings bonds from 1935 to present, the Treasury Department has launched an online timeline that captures major milestones through the years.

"As we transition our savings bond program online—a move that will produce significant taxpayer savings—we wanted to step back and remember how savings bonds came to symbolize the events, people and places that shaped our nation through good times and difficult periods over the past 76 years," said Treasurer of the United States Rosie Rios.

The interactive timeline features archived images of savings bond posters, special events and other memorabilia through the years, including photos or videos of movie stars such as Judy Garland and Mickey Rooney and popular television programs such as"Lassie," "The Bugs Bunny Show" and "Cheers."

The interactive timeline is available at www.treasurydirect.gov/timeline.htm.