The federal government is not exactly renowned for its efficiency. But the government’s slowpoke ways might have reached a new low for those who buy bonds through the TreasuryDirect website.
If you want to move your Treasury bonds from the website to a brokerage account, you might have to wait up to one year, according to a recent report in The Wall Street Journal.
The combination of a surge in interest in such bonds and a creaky website has left the government struggling to keep up with demand.
In 2019, there were just 656,000 funded accounts on TreasuryDirect, according to the WSJ. By last year, that number had swelled to more than 4 million.
TreasuryDirect’s newfound popularity was a result of people buying inflation-adjusted government savings bonds in an era of rising prices. According to the WSJ:
“The resulting customer-service backlog is straining the Treasury Department’s antiquated system, which can require verified signatures and paper forms sent through the mail. People transferring securities from TreasuryDirect to third-party brokerages experience especially long waits because those requests are processed manually, according to people familiar with the matter.”
While you can purchase bonds at TreasuryDirect, you must transfer Treasurys to a brokerage if you plan to sell them. TreasuryDirect tries to complete transfers within six weeks.
However, the government is warning customers that it could potentially take up to 12 months to make the transfers when capacity is stretched. As of July, the longest delays had been six months.
It’s worth noting that the delays should not impact those who have purchased Series I savings bonds, as they cannot be traded.
A Treasury Department spokesperson told the WSJ that the agency hopes to modernize its system so it can make long delays a thing of the past.
But for now, you have been warned. If you hope to avoid a long wait, one alternative is to purchase Treasurys through a brokerage account.
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