This is just a quick update to my earlier post about overpaying our taxes to get extra Series I Savings Bonds. As a quick reminder, the Treasury has (mostly) phased out paper savings bonds while increasing the electronic purchase limit to compensate for the change. But you can still get paper bonds (and circumvent the $10k stated limit) as part of your tax return.
To make sure we’d get the full $5k amount, I ended up requesting an extension and making an overpayment just before the deadline. Once that payment cleared, I then filed our return along with IRS Form 4868 requesting the savings bonds. A few weeks later, the bonds arrived in our mailbox.
One mildly annoying (though somewhat amusing) thing about this is the way they denominate your purchase. You’d think that a $5k bond purchase would come as a $5k bond, but their rules regarding tax refunds stipulate that the first $250 is given out as 5 x $50 bonds, with the balance being denominated so as to minimize the total number of bonds issued.
In practice, this means we got the following bonds:
- 6 x $50
- 1 x $200
- 1 x $500
- 4 x $1000
I’m not sure why they do it this way, but they do. You’d think they’d simply minimize the total number of bonds issued so as to save on printing and postage, but they don’t. Who knows, maybe they have a stockpile of $50 bonds that they’re trying to burn through.
Since these were issued in May, we got the prevailing fixed and variable rates of 0% and 2.20%, respectively.