Savings Bonds for Non-customers

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Question:

As a bank, are we required to sell and redeem US Savings Bonds for non-customers? My supervisor believes we may have to provide this service and that it may be tied to the bank's FDIC insurance coverage. I have searched the FDIC website and couldn't locate any information. The US Treasury website just states that individuals may purchase at "some" banks. This led me to believe that it would be a bank policy vs. requirement to offer this service to non-customers. We are considering revising our risk assessment for this service; not offering it to non-customers.

Answer:

Bond sales and redemption are not tied to your FDIC insurance. Your bank had to apply to become a sales and redemption agent.

Before you make any move to deny access to non-customers, familiarize yourself with the requirements of your agency agreement. You could find that in order to provide the service to your own customers, you will have to do so for others, at least up to specific dollar amounts. I know that's true of redemptions.

First published on BankersOnline.com 9/06/10