If you submit your tax return and realize that you can get a refund, you probably will start to make a plan to spend the money. There are many choices for you to consider, yet it will be a wiser decision if you pick a savings bond.
Why should you do that?
Savings bonds are regarded as the safest savings options because the bonds are fully secured by the U.S. government. Therefore, compared with stocks and other investment tools, you are less likely to get a huge loss.
The Series I bond provided by the IRS is a good choice for you to spend your tax refund. The bond does not have a fixed interest rate throughout its entire life. If the economy performs well, you can earn a bit more money. Besides, the bond is well protected from inflation.
How to buy savings bonds?
The Internal Revenue Service (IRS) offers an expanded IRS Form 8888 that enables taxpayers to purchase the bonds with their tax refund. The bonds can be purchased up to $5,000. If you still have some tax refund left, you can have it delivered by direct deposit or by check. If you choose the direct deposit option, you can ask the IRS to deposit the refund directly into your bank account through the Form 8888. The bonds will be delivered by mail to your address in the form of paper.
The Series I bond is bought through par value. You can purchase the bond either for yourself or for others. Though the bond might not be sold or purchased in a secondary market, it can still be redeemed for the principal, and you may accrue earnings after a year. Savings bonds are often deemed as a long-term investment. If you redeem it within the first five years, you may lose the interest of the last three months. If you need more information on buying savings bonds with your tax refund, you can visit the IRS website for details