Charlotte Gorbold
Since 2012, when banks stopped selling paper savings bonds, buyers have been limited to making their purchases electronically, with one exception: You could buy up to $5,000 in paper series I savings bonds (I-bonds) with your IRS tax refund each year.
But starting January 1, 2025, that option will no longer be available.
Why are paper I-bonds being ditched?
The Tax Time Savings Bonds (TTSB) program was launched in 2010 to give tax filers the ability to buy 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.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
That represented just 0.03% of all tax filers, and less than 10% of I-bond purchasers. The IRS says that running the program is costly and mailing paper bonds leaves them open to fraud, theft, loss and delays.
Can I still buy paper I-bonds if I haven’t filed my 2023 tax return yet?
Before the program ends, there’s still a chance to buy paper I-bonds if you received an extension to file your 2023 tax return with a deadline of October 15, 2024.
You’ll need to fill in IRS Form 8888, and your bonds will be mailed to you once your tax return has been processed.
What should I do with my existing paper I-bond(s)?
While there’s no obligation to do so, you can convert paper I-bonds to electronic bonds using TreasuryDirect. It’s free to do, and you’ll need to set up an account if you don’t already have one.
Be warned, however: TreasuryDirect can be hard to navigate. And if you’re not ready to go electronic, you can hold onto your paper I-bonds until you’re ready to cash them.
Should I buy electronic I-bonds in 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. Bonds issued from May through 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 inflation rate based on the consumer price index, as well as a fixed rate for bonds issued from November 2024 through April 2025.
While rates may not compare especially well to the best high-yield savings accounts and the best CD rates, which are giving returns over 5%, bonds are still considered a stable and low-risk option for growth.
Note: A version of this item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
Related content
-
What About Those ‘Guaranteed’ Life Insurance Ads?Guaranteed life insurance policies can sound tempting if you've been declined for insurance elsewhere. Here are four downsides and one alternative.
-
13 Answers to Pressing Social Security QuestionsFrom smart claiming strategies for couples to tips on maximizing your monthly check, we have advice that can help you.
-
What About Those ‘Guaranteed’ Life Insurance Ads?
Guaranteed life insurance policies can sound tempting if you've been declined for insurance elsewhere. Here are four downsides and one alternative.
-
Keep Tax Collectors at Bay with Muni Bond FundsMunicipal bonds can be good insurance against inflation — and interest is tax-free. But as with all investments, understanding risk is key.
-
Eight Tips From a Financial Caddie: How to Keep Your Retirement on the FairwayThink of your financial adviser as a golf caddie — giving you the advice you need to nail the retirement course, avoiding financial bunkers and bogeys.
-
Just Sold Your Business? Avoid These Five Hasty MovesIf you've exited your business, financial advice is likely to be flooding in from all quarters. But wait until the dust settles before making any big moves.
-
Cord Cutting Could Help You Save Over $10,000 in 10 YearsHow cutting the cord can save you money and how those savings can grow over time.
-
Should I Buy Stocks or Should I Buy Bonds Right Now?Generally speaking, stocks provide reasonable growth while bonds provide stable income. Each play important roles in diversified portfolios.
-
You Were Planning to Retire This Year: Should You Go Ahead?If the economic climate is making you doubt whether you should retire this year, these three questions will help you make up your mind.
-
Are You Owed Money Thanks to the SSFA? You Might Need to Do Something to Get ItThe Social Security Fairness Act removed restrictions on benefits for people with government pensions. If you're one of them, don't leave money on the table. Here's how you can be proactive in claiming what you're due.
