Microsite > Consumer Resources > Tip of the Week

Tip of the Week

Savings Bonds

Expecting a tax refund this year? Consider setting aside a portion of it for savings. A great option for taxpayers of all income levels is saving bonds. Setting aside small sums of money in a safe place allows people to manage unexpected events, opens up opportunities for education, and helps build future financial security.
Did you know that for 75 years, Americans have had access to U.S. Savings Bonds? Today saving in bonds is easier than ever with the option to split a portion of your federal tax refund directly into Series I U.S. Savings Bonds. Simply check of a box on IRS Form 8888.

Quick Facts about Tax-Time Savings Bonds:

  • Tax-Time Savings Bonds are Series I U.S. Savings Bonds.
  • Tax-Time Savings Bonds are issued and guaranteed by the U.S. Treasury Department.
  • Tax-Time Savings Bonds are giftable. You can buy bonds for yourself or a loved one.
  • Tax-Time Savings Bonds are not expensive. You can buy one for as little as $50.
  • Tax-Time Savings Bonds earn interest.
  • Series I Savings Bonds currently offer an interest rate of 1.76 percent, and they’re exempt from state and local income taxes. What’s more, interest earnings may be exempt from federal income taxes when the earnings are used to pay for qualified higher education expenses.

It’s really simple to purchase them too:

  • Fill Out IRS Form 8888: Complete this form to designate an amount to buy paper Series I Savings Bonds
  • Set Up a TreasuryDirect Account: Although you can buy paper savings bonds with your tax refund, electronic savings bonds are even easier to manage onlin

They also make great gifts:

  • Give Paper Savings Bonds as a Gift with Tax Refund Dollars. You may use your tax refund to buy paper savings bonds as a gift to others. To do so, add the recipient's name as a “co-owner or beneficiary” on Form 8888.
  • Give Electronic Savings Bonds as a Gift with Tax Refund Dollars. You may use your tax refund to give electronic savings bonds as a gift to others. First, use Form 8888 to make a deposit into your TreasuryDirect account. Then, use your TreasuryDirect account to make a gift of this deposit.

Tax time savings bonds are simple to understand, safe, and convenient to purchase. If you are ready to get serious about finances this year, consider using your tax refund to jump start your savings.
 

FacebookTwitter

Montana Credit Unions for Community Development (or MCUCD) is the award-winning, charitable arm of the Montana Credit Union Network. A state-wide nonprofit organization, MCUCD works together with the state's credit unions to improve the lives and financial independence of all Montanans.