On September 5, 2009, 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 took effect in the 2010 tax season, and for the 2011 tax season, tax filers will be able to order savings bonds in the name of others, such as children and grandchildren, and need not use direct deposit in order to buy bonds. To the extent the bonds are used to pay for higher education of the bond holder or a dependent, interest on the I Savings Bonds is completely tax free. This makes the I Savings Bonds a great college savings tool for children or family members with higher education in their futures. Depending on the amount of one's tax returns, 18 years of savings, over the life of, for example, a new born child, could go a long way to building a tax free college savings account!

The Treasury Department will mail bonds directly to taxpayers’ homes within a few weeks of receipt of refund. The bonds you will receive, U.S. Series I 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 0.74%, compared to the national average of 0.60% being paid on 1 year 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.