This Page Contains Information Relevant to State Employees

How do I purchase savings bonds through payroll deduction?

• Contact your Personnel/Payroll Office. They will provide you with form Std. 242 for completion. Completion instructions are provided. When you enroll in the savings bond program, you will authorize the State Controller’s Office to begin withholding deductions from your warrant / direct deposit payment each month to be used towards the purchase of the savings bond. You will determine what your monthly deduction amount will be based upon the denomination amount of the bond and the number of months you choose to accumulate the purchase price of the bond. This escrowing service provided by the State Controller's Office can be used for the combinations listed in the following chart:
  
  

  Denomination Amount	Purchase Amount	Deduction Amount	Pay Periods
  100.00	50.00	12.50	4
  100.00	50.00	25.00	2
  100.00	50.00	50.00	1
  200.00	100.00	25.00	4
  200.00	100.00	50.00	2
  200.00	100.00	100.00	1
  500.00	250.00	50.00	5
  500.00	250.00	250.00	1
  1000.00	500.00	100.00	5
  1000.00	500.00	500.00	1

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Can I purchase more than one savings bond at a time?

• Yes. You can have up to four different active bond accounts as long as there are no exact duplicates. Each account is treated separately.

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Can I purchase Series EE U. S. Savings bonds through the payroll deduction program?

• Yes, you may purchase Series EE savings bonds through the State's payroll deduction program.

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Can I purchase I bonds through the payroll deduction program?

• No, the State doesn't offer I bonds through payroll deduction at this time. However, individuals can now purchase and redeem both Series EE and I bonds on-line via the US Department of the Treasury's electronic paperless process.

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How can I find the bond account number on the savings bond?

• The bond account number is the three digits located on the lower, right side of the bond, next to CA#.

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Are there different ways ownership of the savings bonds may be held?

• Yes. There are three different ways you may register ownership of the bond when you sign up.
  • Single Ownership -- Only the registered owner may cash the bond. Upon death of the owner the bond becomes part of the owner's estate.*
  • Co-ownership -- Either owner may cash the bond without the knowledge or approval of the other.
  • Beneficiary -- Only the owner may cash the bond during his/her lifetime. The beneficiary, if he/she survives the owner, automatically becomes the sole owner upon the original owner's death.

*All owners, co-owners or beneficiaries must be individuals. Public / private organizations or trusts are not allowed.

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How is the interest rate determined for Series EE savings bonds?

• The date you purchased your Series EE savings bonds will determine how the interest rate is calculated. This information can be found on the U.S. Saving Bonds main page of the Bureau of the Public Debt Web site.

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Is there a minimum period I must hold the savings bond before I can cash it?

• Yes. Savings bonds issued January 2003 and earlier must be held for at least six months before they can be cashed. Savings bonds issued February 2003 and later must be held for at least 12 months before they can be cashed.
  
  For more information on the extension to the holding period, go to the EE & I Bond Minimum Holding Period Extension page of the Bureau of the Public Debt Web site.

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If I start purchasing savings bonds, how/when will I receive them?

• Savings bonds will be mailed to you based on the address you provide when registering for the savings bond. You should begin receiving the bonds approximately 4-5 weeks after your payroll deduction that sufficiently meets the purchase price of the bond. In the case of escrowing (deducting less than the full purchase price each pay period), your bond will be received approximately 4-5 weeks after the deduction is withheld that brings your accumulated withholding up to the purchase price. For example, you sign up for the savings bond program for a $100 bond ($50 purchase price) with a $25 deduction coming out of your warrant/direct deposit payment each month. Your first $25 deduction is withheld from your warrant/direct deposit payment dated March 1 and your second $25 deduction is withheld from your warrant/direct deposit payment dated April 1. The April 1 deduction will bring your accumulated bond withholdings up to the $50 purchase price necessary to purchase a $100 savings bond. You should receive your savings bond from this purchase toward the end of April or beginning of May.

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Are there any tax advantages to purchasing U.S. Savings bonds?

• Interest earned on savings bonds is subject to Federal income tax, but not State or local income tax. You may elect to pay tax on interest annually as it accrues or defer the tax until the bond is cashed or reaches final maturity. Also, there are certain methods of having your child as the owner or beneficiary that may also allow you to exempt certain amounts of the interest income from taxation. For more information, please contact the Internal Revenue Service and request Publications 550 and 929 and Forms 8815 and 8818 or go to the U.S. Savings Bonds Web site.

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What if my savings bond gets lost or stolen?

• You must send a letter, including your name, SSN, current mailing address, phone number, dates of bonds and authorized signature, explaining what has occurred. The State Controller's Office will fill out the necessary paperwork to have your savings bond replaced. The letter should be mailed to the following address:
  
  State Controller's Office
  Personnel/Payroll Services Division
  P.O. Box 942850
  Sacramento, CA 94250-5878
  ATTN: Bond Unit

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If I would like to find out how much interest my savings bonds have earned or if I have other questions about savings bonds, is there somewhere I can find this information?

• Yes. The U.S. Savings Bonds Web site contains diverse information on U.S. Savings bonds.

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If I have a change of address and I am currently receiving a savings bond in the mail, will the address for the bond also be corrected when I complete and turn in my Employee Action Request (EAR, Std. 686)?

• No, you must complete a Std. 242 anytime there is a change to the mailing address for the savings bond. Even if the bond is being mailed to you, the employee, the EAR will not change the address on the bond. You may also find this information on the reverse side of the EAR, Std. 686 document.

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How can I cancel my savings bond deduction?

• To cancel a savings bond deduction, you must complete the form Std. 242. The form must be completed in triplicate and sent to your Personnel/Payroll Office. Your Personnel/Payroll Office will send the form to the State Controller's Office, Personnel/Payroll Services Division, Savings Bond Unit for processing.

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State Controller's Office
Personnel/Payroll Services Division
P.O. Box 942850
Sacramento, CA 94250-5878

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Last Modified: May 24, 2005