The Payroll Savings Plan allows your employees to purchase savings bonds in denominations ranging from $50 to $10,000 for Series I bonds and from $100 to $10,000 for Series EE bonds. The program can complement an existing investment plan, such as a 401K, or can serve as a stand-alone savings vehicle. The program is inexpensive and easy for your organization to administer.  For example, savings bonds:

	are a safe investment backed by the full faith and credit of the United States.
	are a convenient and painless way to save because the cost of a bond is deducted automatically from an employee’s pay.
	are flexible and can be used to satisfy short or long-term savings goals (for retirement, children’s education, a home purchase, or as an emergency reserve).
	offer tax advantages. The interest earned from a savings bond, which is deferred until the bond is redeemed, is exempt from state and local taxes. When savings bonds are used to pay for higher education, some or all of the interest may be excluded from federal taxation.
	require a low minimum investment.

Each year, 15 million people purchase savings bonds. Currently, 55 million Americans own more than $187 billion in savings bonds, making them the world’s most widely held security.

To initiate the program, each participating employee signs an authorization card designating the amount to be deducted each pay period for the purchase of savings bonds and providing bond ownership information. At the end of each pay period, savings bonds are purchased for employees who have accumulated the purchase price. [The purchase price also can be accrued by the deduction of small amounts over time.]

The order and payment are then submitted to the Federal Reserve, which processes the orders and issues the bonds. This process continues until an employee gives written notice to cancel the arrangement or leaves your employment.