An Easy Way to Save Money: Savings Bonds Through Automatic Deductions

We all know how important saving is, especially for retirement. It doesn't matter how young you are. Those who begin to diligently save at a young age can be wealthy in their later years, just based on their retirement dollars. Still, setting aside money can be hard to do. Whether or not you have a retirement or savings plan through your employer, here's an idea you should know about.

You can purchase U.S. Savings Bonds through a simple and safe process that is about as painless as savings can get. You can log onto TreasuryDirect, fill in key information and open your own savings bond purchase account. Then submit a request to your company's payroll processor to start deducting a specified amount from your paycheck. As your account builds, the payroll processor sends your savings to Treasury Direct to purchase savings bonds in your name. If your employer doesn't already have a plan for doing this, talk it over with the payroll processor first to find out if he or she is willing to handle it for you.

Why is Treasury Direct better than traditional payroll savings accounts?

Because if you have a computer with secure Internet access, you can buy, manage, and redeem your savings bonds at any time, 24/7.

Do you have to go through your employer to use the savings bond program?

According to Treasury Direct, you do not. Some employers may not be willing, even though the process is simple. Or maybe you are self-employed, unemployed, or just prefer to do it yourself. In that case, you can arrange to have money taken right out of your checking account, your savings accounts, or even your pension account or an annuity to purchase savings bonds.

The bonds you can buy are Series EE and I. Both types of savings bonds are sold electronically at face value. So a $50 savings bond sells for $50, and accrues interest over its life. If you prefer, you can also buy both types of savings bonds on paper at financial institutions, though paper savings bonds will eventually be phased out. Paper EE savings bonds are sold at 50 percent of their face value.

How long does it take for a Series EE or I savings bond to mature?