Q: Someone told me that you could now receive part of your tax return in the form of a savings bond.  Is this true, how do you do it, can it help me save?

A: Yes, it is true, and this innovation makes saving Easier for all Families and individuals.

On Sept. 5, the President announced a new idea to help Americans save more—the opportunity to easily buy U. S. Savings Bonds at tax time. Under the new rules, taxpayers that are receiving refunds can check a box on the tax form and order U.S. Savings Bonds with part of their refund. This opportunity will be in effect for the upcoming tax season (2010) and is scheduled to be expanded in 2011.

The Treasury Department will mail bonds directly to taxpayers’ homes within a few weeks of receipt of refund.  The bonds you will receive, Series I U. S. Savings Bonds, have some unique features that help small savers and new savers get started on saving money for the future.

U.S. Series I Savings Bonds are safe, protected against inflation, require no credit check, and are also available to ITIN holders. The current interest rate for I Bonds is 3.36%, compared to 0.01% to 1.2% being paid on average by savings accounts and CDs.  Savings Bonds were designed for new and small savers and have a low entry minimum of $50.  They pay interest for 30 years and are redeemable starting one year after purchase (after five years they can be redeemed without penalty). There are no fees or charges.  A Savings Bond is an IOU directly from the U.S. government to the bond holder. 

Impulse saving is now possible, for more information, including fact sheets and explanatory videos, visit www.d2dfund.org/taxtimebonds
Or visit your participating VITA organization

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