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Expert Q&A Archive

03/24/2010
How to use your tax return refund to purchase U.S. Series I Savings Bonds?
I am from the state of Florida, and I was wondering if you could explain how to use your income tax refund to purchase a U.S. savings bond.
Alyssa Rakovich:
expert info »
You can purchase savings bonds at most, if not all, banks. Deposit your tax return into your savings or checking account at your bank; then, purchase savings bonds from your bank.
Richard Keeling:
It is called the Series I bond. You can choose to receive your return refund in U.S. saving bonds. The minimum is $50 and a maximum of $5,000. It has to be a round number, so you can't request the bond for $75. It is a really good initial way to start a savings, and right now the percentage interest is 3.36%t. That percentage is above any of the savings accounts out there. On the IRS Form 8888 you can check the box and state the size of the increments you would like, though it has to be in $50 increments up to $5,000. It's a separate from your return, but it is a simple form that comes with your tax return paperwork, whether you use a free tax prep site or a paid preparer.

[Editor’s Note: You can now receive up to $5,000 of U.S. Series I Savings Bonds as part of your income tax refund without setting up a TreasuryDirect® account in advance. For more details, see IRS Form 8888 or http://www.irs.gov/individuals/article/0,,id=163764,00.html]
 

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