How safe is Treasury Direct?


J

Jimmy Smith

It seems just too easy to attach a bank account to Treasury Direct without
any verification from them. While reading the fine print, Treasury Direct
seems to hold themselves blameless for almost ANY theft that may occur on
your account.

Since over time investors may have a lot of money held there, Treasury
Direct should at least have in place the basic security devices found on
most online banking facilities. Have these security issues been talked
about here? Also, they do not send a monthly report to investors. If there
was a problem, it could take a very long time for an investor to discover it
unless they constantly went online to review their investments.

Too bad they took away the ability to buy paperbonds online.

Jimmy
 
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A

Anoop Ghanwani

I am not yet at the stage where I feel comfortable linking my
checking account to any other site. That's the reason why I've
also stayed away from ING Direct even though they offer great
interest rates. But I'm generally slow to adopt new technology
for things like this; e.g. when accessing account information
online was introduced, it took me a few years before I felt
comfortable using it.

I now buy ibonds at my bank's local branch. It is a bit of pain
(as compared to buying it while sitting on the sofa at home
at any time of the day), but it allows me one less worry.

Anoop
 
J

JSR

Jimmy-

I'm not sure if I'm stating the obvious here, appologies if I am. If you use
treasury direct can you link the purchases to a credit card in lieu of your
personal checking account? If that is a possibility you will gain an extra
layer of protection as the card company may only hold you liable for fraud
on the card up to a certain limit, if at all. They will be more likely to go
to bat for you and resolve the problem more quickly than your bank. And in
the mean time your source of immediate cash funds will not be tied up.

Credit cards are a risky game in and of themselves, especially if you are
carrying a balance. If you are not carrying a balance and you pay off the
purchases by the due date, then buying the treasuries with a card may not be
a bad idea. If you are carrying a balance, however, the interest charges
will rapidly eat away at the returns on your treasury investments.

I have an ING Direct account that is linked to our personal checking account
and have had no problem. A single person's experience, I realize. The level
of technology and security they bring to the table, however, is fairly
impressive and I sleep well at night knowing my personal funds are
reasonably protected. PayPal is another story, however.

-JSR
 
J

Jimmy Smith

You are no longer allowed to buy EE or I Bonds on your credit card. That
was discontinued at least several months ago.
 
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The TreasuryDirect method of linking to your bank account is a worthwhile security feature. Once the link is established and verified, it is somewhat difficult to change (you must submit a form to TreasuryDirect with the bank manager's stamp on it). TreasuryDirect will only move money to/from your bank account, so it's pretty safe.

The problem with TreasuryDirect is that their site is difficult to navigate and often is slow or unavailable (today it's taking several minutes to load each page).

TreasuryDirect used to have a crazy logon scheme that utilized magic decoder card that you had to use to log on. And if you screw it up just a few times you are locked out until you call them and plead to let you log on. Apparently that's changing today, and their web site has crashed because of it.
 

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