savings

Should you store savings bonds online?

Lots of bells and whistles. Treasury spokeswoman Harris says that TreasuryDirect has many investor tools.

Savings bond data are logged onto the savings bond wizard, for example, that can be printed out and stored with other documents. "You input all the information and get back your bond interest and its value," says Harris. "It also does a wonderful job tracking your holdings."

Another helpful tool called Treasury Hunt helps you locate lost savings bonds. But there's a caveat: You can only track down bonds that have matured and were issued after 1974. You can also convert your paper E savings bonds into electronic ones using the SmartExchange tool.

Harris adds that TreasuryDirect site is updated every two years. "We constantly streamline the site," she says. "It's easy to use."

Cons

Don't expect a mailed statement. Unlike banks or a brokerage firm, TreasuryDirect doesn't send you a yearly paper statement listing your assets. The reason: The IRS gives you the option of reporting interest annually or deferring taxes until you cash in the bonds.

"Online you can get your annual tax forms," says Adams. "But you won't get paper statements." This can be a big drawback, he says. "It's possible to forget you have the account."

The answer, counters Harris, is doing a thorough due diligence. "Your will should spell out where your assets are held," she says.

However, your TreasuryDirect account can also include Treasuries, which helps organize your finances. You can print out the screen for your records.

"If you diversify too much, it can be complicated," says Adams. "It's handy to store your investments in two or three places, not dozens." He recommends keeping Treasuries with TreasuryDirect and stocks with a brokerage firm.

No face-to-face contact. Forget walking into a Treasury office for help. Instead, you must call a toll-free number, where you talk to a Treasury representative. TreasuryDirect's savings bond locator tells you which number to call. Adams doesn't see this as a drawback, though. "More and more, money is electronic," he says.

"Generally, I don't see a downside to using TreasuryDirect," says Adams. "It depends on how sophisticated people are with online banking."

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