Voluntary Deductions
Savings Bonds Purchases
Note: Effective Jan. 1, 2011, Treasury Direct discontinued allowing employers to purchase savings bonds for their employees through payroll deduction unless the employers allow Treasury Direct to debit business accounts for the purchases.
Treasury Direct no longer accepts a file and check to purchase savings bonds on behalf of employees, as it had before. Texas statute requires the deduction to be made from the employee’s payroll and the deduction amount deposited into an agency account set up just for savings bonds that is held in the state treasury.
On payday, the agency creates a file to send to Treasury Direct that lists all employees who are purchasing a payroll deduction along with the appropriate information about the bond type, denomination amount, name of owner, co-owner or beneficiary, effective date and Social Security numbers. The agency will have some moneys left in the agency account because the employees are not required to deduct the exact amount for the purchase of a bond.
With the 2011 requirements, agencies are no longer able to offer payroll deduction for savings bonds. An employee can still purchase savings bonds through Treasury Direct by establishing their own instructions and allowing Treasury Direct to access the employee’s personal bank account to fund the purchase.
A state employee may purchase United States Savings Bonds through payroll deduction.
For information on Series EE/E Bonds and Series I savings bonds, see Treasury Direct.
The employee must authorize the deduction electronically or in writing. The authorization must state the:
- Effective period.
- Amount to be deducted.
– and – - Denomination of the bonds to be purchased.
Money deducted from an eligible employee’s check is held in trust. When the amount withheld is sufficient to make a bond purchase, the bond purchase will be made in the denomination designated by the employee. The bonds are delivered by the Federal Reserve Bank to the address designated by the eligible employee on a deduction authorization form.
The U.S. Treasury has set a $5,000 annual purchase limit per Social Security number. This limit applies separately to Series EE/E and Series I savings bonds.
| An agency must stop the savings bond deduction if: |
An agency must change the savings bond deduction if: |
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On termination of the deduction, any money that has been deducted but has not yet been used to purchase savings bonds must be remitted immediately to the individual.
Agencies must keep records at all times that itemize the money deducted and disbursed for the purchase of savings bonds. State agencies send payment and deduction details to a Federal Reserve bank each time bonds are purchased.