made a point about Series I U.S. Savings Bonds that two readers insist was wrong. Wrote Geoff Weaver:
I'm a regular reader of your column, keep up the good work. One item in Sunday's column appears to be a mistake however, unfortunately. You mention any warm body with SSN can buy $10k/yr in I-bonds; wish that were true but to my knowledge that figure was reduced to $5k/yr a year or two back when the Treasury stopped offering the paper option at local financial organizations; now you can only buy them at Treasury Direct online and their limit is $5k/person per year. Would be wonderful if I'm wrong about this as I maximize my I bond purchases,
In one sense, Mr. Weaver is right. It's Only Money wasn't entirely accurate. But he's since discovered he missed an important development.
In January 2012, when the U.S. Treasury stopped issuing paper bonds through financial institutions, it also
on Series EE and Series I savings bonds purchases.
The limit is now $10,000 of electronic bonds purchased at
. Says so
.
But there's a way to get even more. And it's the only way to get paper bonds.
Treasury and the Internal Revenue Service allow you to divert
. And you can get any of them in paper form.
The limit each return: $5,000. That's on top of the $10,000 limit in electronic bonds, a Treasury spokeswoman confirmed.
So, if you're in line for a big refund, you can easily purchase more than $10,000 in savings bonds each year.
To get them via your tax refund, simply include
with your return. You'll find you can put purchase them for the benefit of others. That's one reason, I'm told, why Treasury hands them out in paper form, to encourage gifting them and providing the recipient with something they can hold.
It's Only Money has explained how I bonds work
. Currently, the bonds pay
. That doesn't sound like much, but it's a better return than most nominal treasuries, and better than
. Also, recall, the rate adjusts every six months to reflect changes in the Consumer Price Index. That way, your original investment always grows at least as much as inflation. The new rate will be May 1.
You can cash them in anytime after one year, and avoid a penalty anytime after five years. Or, you can hold them for 30 years. And if you use them to pay tuition expenses, the IRS won't charge taxes on the bonds' interest.
I bonds are still
. So think about investing in them this tax season, or giving a loved one a gift they can hold in their hand – and use to further their education.
-- Follow It's Only Money on
,
or
.