Savings Bonds go paperless

It felt like a windfall.

It was the Orwellian year of 1984. I'd just graduated high school and was set to go to college with just a few dollars of spending money - not enough, even if I did manage the part-time job I hoped to find when I got there. Grandparents sailed to the rescue: In June arrived a loving letter with a stack of colorful U.S. Savings Bonds. They'd bought them during my infancy, so the bonds were fully mature after 16 years, worth double what they'd paid. I still remember holding the thick paper stock in my eager little hands, feeling quite grown up cashing them at the bank.

I won't be able to do that for my grandchildren, at least not so tangibly. As of Jan. 1, 2012, U.S. Savings Bonds have gone paperless. No longer sold by bank tellers, they're only available through Treasurydirect.gov.

President Roosevelt issued the first savings bond in 1935. Nicknamed "the baby bond," it had a $25 face value and sold for $18.75, a way for the government to raise funds at low risk to investors. With World War II in full swing by 1941, FDR appealed to citizens to buy new "defense bonds" to help finance the war and publicly bought the first himself. After Pearl Harbor these became known as war bonds. Payroll-deducted purchase of savings bonds (the Payroll Savings Plan) also began in 1942.

It wasn't until after the war that savings bonds became a popular way to build a nest egg. In 1946 more were sold than cashed.

There are several types of U.S. bonds; the most common is the current EE - buy, hold, and cash years later for full face value. Series H (now HH), introduced in 1952, pays interest every six months for 30 years. In 1990 the Education Savings Bond appeared - a way to deduct cashed bonds from taxes if used for tuition. Series I bonds are an option since 1998 and are tied to the consumer price index, insulated against inflation.

Sagging sales? Ask Hollywood. "The Hollywood Bond Cavalcade" was a traveling show featuring big names such as Judy Garland, Mickey Rooney and Lucille Ball pitching bonds as patriotic duty during the war. Entertainment's appeal didn't stop there. Norman Rockwell and other artists designed posters, and in the 1950s script writers worked in savings bond references on "Father Knows Best," "Lassie," and other TV shows. "Cheers" featured a bond pitch in the 1990s.

Series EE and I bonds have been available online since 2002. A decade later it's become the only way to buy them (but banks will still honor the old paper ones). They tell us this will save $120 million over five years.

Perhaps, but they won't be as much fun to cash.

Sholeh Patrick is a columnist for the Hagadone News Network who mourns the loss of paper letters and focused conversation. Email sholehjo@hotmail.com