Discover the New Way to Invest Your Tax Refund in 2025: Say Goodbye to Paper I Bonds

If you planned to use your 2025 tax refund to purchase paper Series I savings bonds, it's time to explore new alternatives. The U.S. Department of the Treasury has officially discontinued the option to buy paper I bonds via tax refunds starting in 2025.

This change concludes a program initiated in 2010 that enabled thousands of Americans—especially those with low to moderate incomes—to directly convert their tax refunds into savings bonds.

Essential Insights

• The Tax Time Savings Bond program ended on January 1, 2025, eliminating paper I bond purchases through tax refunds.
• Investors can still acquire electronic I bonds online at TreasuryDirect.gov, with purchase amounts ranging from $25 up to $10,000 annually.

Understanding the Tax Time Savings Bond Program

Launched in 2010, this program empowered taxpayers to convert their refunds into paper Series I savings bonds, promoting savings among those who might otherwise lack access to investment options. It was the last avenue to obtain paper I bonds after banks ceased selling them in 2012 and other paper bond initiatives were phased out.

Despite its benefits, the program saw limited use. Treasury data reveals only about 35,000 filers—merely 0.03% of all tax filers—participated each year, and fewer than 10% maintained participation for over two consecutive years.

Reasons Behind the Program's Discontinuation

The Treasury Department ended the Tax Time Savings Bond program primarily due to cost inefficiencies and low participation. Maintaining the infrastructure for printing, mailing, and processing physical bonds proved expensive and less practical.

Additionally, paper bonds posed higher risks of fraud and counterfeiting compared to digital versions, prompting a shift toward electronic alternatives.

How to Purchase I Bonds Today

Electronic I bonds offer greater flexibility than the former tax refund method. You can buy them anytime through TreasuryDirect, the Treasury's official online portal for government securities.

Annual purchase limits reset each calendar year, allowing you to time your investments strategically.

To create a TreasuryDirect account, you'll need:

• A valid Social Security Number
• A U.S. residential address
• A checking or savings bank account
• An active email address
• A web browser supporting 128-bit encryption

Important Notice

Paper I bonds purchased before 2025 cannot be replaced if lost or stolen unless you retain the serial numbers. Consider converting your paper bonds to electronic format via TreasuryDirect for enhanced security and ease of management.

Purchase Limits and Gift Options

Electronic I bonds allow purchases down to the penny, starting at $25 up to $10,000 annually, without the $50 increment restriction of paper bonds. For example, you can buy an I bond for $63.47 if desired.

Additionally, TreasuryDirect enables you to buy I bonds as gifts for family members, including children.

Managing Your Existing Paper Series I Bonds

If you already hold paper I bonds from previous tax refunds, you can keep them until maturity or until you choose to redeem them. Store these bonds securely, such as in a safe deposit box, and maintain records of their serial numbers to protect against loss or damage.

Final Thoughts

While the direct purchase of paper I bonds using tax refunds has ended, TreasuryDirect's electronic I bonds provide a modern, flexible, and secure way to invest. With lower minimum amounts, precise investment increments, and faster processing, electronic I bonds are the smart choice for savers in 2025 and beyond.

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