$10k contribution limits on electronic I Bonds and EE Bonds in 2012

[akratic]

Looks like the contribution limits for electronic I Bonds and EE Bonds was raised from $5k/yr to $10k/yr!  I Bonds.  EE Bonds.

$10,000 maximum purchase in one calendar year.

[moda0306]

BOOM!!!!

[Lone Wolf]

Oh yeah!!  I and every grandma with an internet connection are gonna be all over this!

Thanks for the post, welcome news.

[Gumby]

Happy New Year!!!

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(For the record, I had faith that they would raise the limit!)

[6 Iron]

Happy New Year!!!

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(For the record, I had faith that they would raise the limit!)

Gumby, you are Nostradamus. I lost faith that it would happen.

[Storm]

"Good news everyone!" - Professor Farnsworth from Futurama

This is awesome - I really dreaded having to send my paper bonds into the Treasury, and having their balance show up in a completely separate place on their website.  It always freaks me out a little bit when I login to check and my balance is half what I expect it to be.

[WildAboutHarry]

Good news for sure, but it pales in comparison to the old days, when you used to be able to do $120,000 in savings bonds per person per year.

[Lone Wolf]

Good news for sure, but it pales in comparison to the old days, when you used to be able to do $120,000 in savings bonds per person per year.

Amazing.  Do you know around what year that was?

If you know, I shall masochistically look up what the I-bond fixed rate was at that time.  Because I like pain.

[moda0306]

LW,

Agreed.  The lost arbitrage opportunities are maddening.

[WildAboutHarry]

Do you know around what year that was?

Early 2000s I think.

[Storm]

Good news for sure, but it pales in comparison to the old days, when you used to be able to do $120,000 in savings bonds per person per year.

Amazing.  Do you know around what year that was?

If you know, I shall masochistically look up what the I-bond fixed rate was at that time.  Because I like pain.

Go here:  http://www.treasurydirect.gov/BC/SBCPrice

Plug in $10,000, issue date of 05/2000, and weep at the 6.72% interest rate bond that is now worth $20,496... 

[Lone Wolf]

Plug in $10,000, issue date of 05/2000, and weep at the 6.72% interest rate bond that is now worth $20,496...   :D

Nice!  Compare that to having been all-in on the stock market at that time and having your portfolio drift listlessly downward and sideways for 12 years.

My sole consolation is that as of 05/2000 I had barely any money at all. 

[moda0306]

It's embarassing that money managers of this time couldn't see the opportunity here.

Think of all the people with between $500k and $2,000,000 during that time, wanting to play it conservative, being shoved into corporate, muni, and marketable treasury bonds without even giving these a second look.

Painful.

[NoRemorse]

Older topic, but I didn't see anyone address this specifically.

I took advantage of sending in additional "estimated taxes" before 1/15/2012 for the 2011 tax year and had my +$5K 2011 refund go into  paper I-Bonds, which I received within about 2 weeks, and the remainder was direct deposited into the bank.

According to the Treasury Direct site (if I'm interpreting it correctly) you are allowed up to $15,000 in I-Bonds.

$5,000 in paper I-Bonds from a tax refund.
$10,000 in digital I-Bonds from TD.

Is that how everyone else interprets this?

From:  http://www.treasurydirect.gov/indiv/res ... ibonds.htm
Buying I Bonds through TreasuryDirect:

    Sold at face value; you pay $50 for a $50 bond.
    Purchased in amounts of $25 or more, to the penny.
    $10,000 maximum purchase in one calendar year.
    Issued electronically to your designated account.

Buying Paper I Bonds:

    Available only through your IRS tax refund
    Sold at face value; i.e., you pay $50 for a $50 bond.
    Purchased in denominations of $50, $75, $100, $200, $500, $1,000, and $5,000.
    $5,000 maximum purchase in one calendar year.
    Issued as paper bond certificates.

[Greg]

Older topic, but I didn't see anyone address this specifically.

I took advantage of sending in additional "estimated taxes" before 1/15/2012 for the 2011 tax year and had my +$5K 2011 refund go into  paper I-Bonds, which I received within about 2 weeks, and the remainder was direct deposited into the bank.

According to the Treasury Direct site (if I'm interpreting it correctly) you are allowed up to $15,000 in I-Bonds.

$5,000 in paper I-Bonds from a tax refund.
$10,000 in digital I-Bonds from TD.

Is that how everyone else interprets this?

From:  http://www.treasurydirect.gov/indiv/res ... ibonds.htm
Buying I Bonds through TreasuryDirect:

    Sold at face value; you pay $50 for a $50 bond.
    Purchased in amounts of $25 or more, to the penny.
    $10,000 maximum purchase in one calendar year.
    Issued electronically to your designated account.

Buying Paper I Bonds:

    Available only through your IRS tax refund
    Sold at face value; i.e., you pay $50 for a $50 bond.
    Purchased in denominations of $50, $75, $100, $200, $500, $1,000, and $5,000.
    $5,000 maximum purchase in one calendar year.
    Issued as paper bond certificates.

NoRemorse,

Thanks for writing about this. When you sent in a very large taxable amount of the Treasury, how did they send you back the refund? Did they send you a check back to your house? And after that where did you go to get your paper I-Bonds? The rest that you're talking about that was deposited into your bank, was this of a check that they sent back to you and you just deposited it into your bank yourself or how did this process work?

Also, it looks like you can convert paper bonds into electronic bonds. My guess is this would be worthwhile at some point to have you do this?

Thanks for the input.

[NoRemorse]

Originally I had paid in enough estimated taxes to cover all taxes for 2011, but I needed to pay more if I wanted to get the refund in the form of $5,000 worth of paper I-Bonds.  So I mailed in enough $$ so that my total refund was a bit over $5K and I indicated that I wanted $5,000 of the total refund to be in the form of a paper I-Bond (using TurboTax) and it was mailed directly to me just as in the past when you'd order a paper I-Bond directly from Treasury Direct.  The remaining refund was direct deposited into my bank account like any normal tax refund.

2011 was my first year to purchase I-Bonds and I was allowed $5K in paper I-Bonds and $5K in electronic I-Bonds for a total of $10K.
But for 2012 it appears that you can get a total of $15K in I-Bonds if you take advantage of the paper I-Bonds via a tax refund.  Many have questioned how long that policy will exist.  I guess I was concerned that they would limit your electronic I-Bond purchases to $5K like they did in previous years if you took advantage of the $5K limit paper I-Bond via the tax refund.  I'm confident the total is $15K but I wanted to see if others agree?

[Greg]

Originally I had paid in enough estimated taxes to cover all taxes for 2011, but I needed to pay more if I wanted to get the refund in the form of $5,000 worth of paper I-Bonds.  So I mailed in enough $$ so that my total refund was a bit over $5K and I indicated that I wanted $5,000 of the total refund to be in the form of a paper I-Bond (using TurboTax) and it was mailed directly to me just as in the past when you'd order a paper I-Bond directly from Treasury Direct.  The remaining refund was direct deposited into my bank account like any normal tax refund.

2011 was my first year to purchase I-Bonds and I was allowed $5K in paper I-Bonds and $5K in electronic I-Bonds for a total of $10K.
But for 2012 it appears that you can get a total of $15K in I-Bonds if you take advantage of the paper I-Bonds via a tax refund.  Many have questioned how long that policy will exist.  I guess I was concerned that they would limit your electronic I-Bond purchases to $5K like they did in previous years if you took advantage of the $5K limit paper I-Bond via the tax refund.  I'm confident the total is $15K but I wanted to see if others agree?

Not sure about the $15k limit. But for those interested, I found these links on the TurboTax website of how to get the I Bonds.

http://turbotax.intuit.com/support/iq/T ... 12768.html
http://turbotax.intuit.com/support/iq/T ... 12767.html

[Storm]

I believe that you can no longer buy paper bonds, so in 2012 you are effectively limited to a maximum of $10,000 in purchases: $5K electronic and $5K from your tax return.

[NoRemorse]

Do you have a source regarding the $5K maximum electronic purchase for 2012?

[WildAboutHarry]

It is $10K electronic, up to $5K paper (only as overpayment of income tax refund for tax-year 2011) for 2012.

It is anyone's guess whether the tax-refund-to-paper-savings-bond program returns for tax-year 2012.

[MediumTex]

It is $10K electronic, up to $5K paper (only as overpayment of income tax refund for tax-year 2011) for 2012.

It is anyone's guess whether the tax-refund-to-paper-savings-bond program returns for tax-year 2012.

If 2011 is the only year they do the tax refund option to purchase paper bonds, those 2011 bonds will be great collectors items.

Think about how rare those will be.

[BearBones]

If 2011 is the only year they do the tax refund option to purchase paper bonds, those 2011 bonds will be great collectors items.

Think about how rare those will be.

They are surprisingly beautiful. Can you get other bonds in paper?

[WildAboutHarry]

They are surprisingly beautiful. Can you get other bonds in paper?

In the "old" days just about every kind of investment was represented physically by elaborate engravings on paper - stock certificates, bonds, etc.  Now almost all are represented by electronic book entries.

Federal reserve notes are nicely engraved representations of promises to pay (or at least they used to be) and they are in decline as well, along with checks, coins, etc. replaced by cards, electronic transfers, etc.

The permanent portfolio is somewhat unusual in today's investment world in that it does (or can) include physical assets - gold, paper money, etc.

[NoRemorse]

The paper bonds that I received from my 2011 tax return are identical to the paper bonds you could buy in 2011.  I suspect this program will live on for a while longer.  After all, how many people like the govt. to hang on to their money instead of themselves?  In other words to participate in the program you would need to have overpaid your taxes.  I seriously doubt this program will get used much so it will probably be allowed to survive.

But at the end of the day I do believe this change now allows you to purchase up to $15,000 in I-Bonds each year so in a round about way this is an improvement for those inclined to take advantage of what's available (tax return).

[smurff]

If 2011 is the only year they do the tax refund option to purchase paper bonds, those 2011 bonds will be great collectors items.

Think about how rare those will be.

Actually, those collectors' item bonds will have 2012 dates, because refunds for the 2011 tax year all come in 2012.