Farewell Paper I-Bonds: Savings Bonds are available online only

Vaseline2 weeks ago

0 2 minutes read

Farewell Paper I-Bonds: Savings Bonds are available online only

Since 2012, when banks stopped selling paper savings bonds, buyers have been limited to making their purchases electronically, with one exception: You can buy up to $5,000 in paper Series I savings bonds (bonds I) with the IRS tax refund each year.

But starting January 1, 2025, this option will no longer be available.

Why are paper I bonds being abandoned?

The Tax Time Savings Bonds (TTSB) program was launched in 2010 to give tax filers the opportunity to purchase paper I bonds using their tax refunds. However, on average, only 35,000 people used this program to buy paper bonds each year, according to the IRS.

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That represented just 0.03 percent of all tax filers and less than 10 percent of bond I buyers. The IRS says the program is expensive to run and that mailing paper bonds leaves them open to fraud, theft, losses and delays.

Can I still buy paper I bonds if I haven’t filed my 2023 tax return yet?

Before the program ends, there is still a chance to buy paper I bonds if you received an extension to file your 2023 tax return with the October 15, 2024 deadline.

You will need to complete IRS Form 8888 and the bonds will be mailed to you once your tax return has been processed.

What should I do with my existing paper I-bonds?

Although there is no obligation to do so, you can convert paper I-bonds to electronic bonds using TreasuryDirect. It’s free and you’ll need to set up an account if you don’t already have one.

Be warned, though: TreasuryDirect can be difficult to navigate. And if you’re not ready to go electronic, you can keep your bonds on paper until you’re ready to cash them.

Should I buy e-bonds in the future?

At TreasuryDirect.gov, you can buy up to $10,000 in electronic I bonds each year, and also $5,000 in I bonds if you use your tax return to buy them. The bonds issued from May to October 2024 have a composite yield of 4.28%, including a fixed rate of 1.3% and an inflation rate (which adjusts every six months) of 1.48%.

In November, the Treasury Department will set a new semiannual rate of inflation based on the consumer price index, as well as a fixed rate for bonds issued from November 2024 to April 2025.

While the rates may not compare very well to the best high-yield savings accounts and the best CD rates, which offer yields above 5%, bonds are still considered a stable and risky option low for growth.

Note: A version of this article first appeared in Kiplinger Personal Finance Magazine, a trusted monthly source of advice and guidance. Subscribe to help you earn more money and keep more money you earn Here.

Vaseline2 weeks ago

0 2 minutes read

Why are paper I bonds being abandoned?

Vaseline

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