Jackie here, with AllClear ID. The Treasury Department has stopped selling paper savings bonds in banks and has switched to an entirely electronic system on the TreasuryDirect website. The new program which took effect January 1, 2012 is expected to save taxpayers $70 million in the first five years.

Buying the electronic savings bonds is easy. They have been available online since 2002. The purchasing process is quite different from buying paper bonds in the bank, but there is a video demo available to walk new users through the process.

One of the biggest changes that accompanies the transition to electronic only bonds will affect only those involved in giving and receiving savings bonds as gifts. Savings bonds require a social security number for purchase and redemption. Previously the purchaser could buy the bonds using their SSN and the recipient could later supply their number upon redemption. Electronic savings bonds do not have this option. The purchaser of the bond must supply the recipient’s SSN to make a purchase.

Any time social security numbers are involved there is a risk for id theft. This new electronic savings bond system makes it more difficult for savings bonds to be purchased and requires the recipient to share their SSN in order to receive a bond. Be careful who choose to share this number with and if you do choose to provide your social security number to a friend or family member for a savings bond gift, make sure they protect your number just as carefully as you do. Learn more at the TreasuryDirect website.