Comments on: Why Lower The Savings Bond Limit to $5,000?

By: Jim

Jim — Thu, 02 Apr 2009 20:15:32 +0000

I totally agree, I don’t know why the restriction exists in the first place!

By: Kathy

Kathy — Thu, 02 Apr 2009 20:14:22 +0000

They restrict American citizens…. and yet they’re freaking out trying to get the Chinese to invest in them. Why not just take the restrictions off the Americans? Is there money better than our money somehow?

By: Bubba

Bubba — Sat, 04 Oct 2008 11:17:38 +0000

I believe that the treasury is concerned about the possibility of a currency collapse and does not want to be on the hook for paying out a rate that would equal that hyper inflation rate.

In light of the Feds recent policy of throwing hundreds of billions into the financial system and the treasury probably going to go for another trillion or so we’re likely to seek the 1929 German Mark look like a stable currency compared to the US dollar of the near term future.

By: Rob P.

Rob P. — Wed, 07 May 2008 11:47:06 +0000

I believe this is just a marketing campaign. Foreign buyers are drying up because of the dollar’s negative real value from their perspective. (Everyone’s inflation rate is running higher than ours… very suspect), the Government just dumped a whole lot of treasuries on the market by way of bailouts and “swaps”, so they are needing someone to pick up their debt! Woo hoo! The average US citizen to the rescuse. As they said, “It won’t affect many” Well no kidding, as if Americans were much savers at all to start with! With our negative real rate also, (i.e., inflation greater than short term treasuries yeidl and almost long term) I can not believe any sensible investor would plop more than a few grand down to start with.

By: Derek Heidbrink

Derek Heidbrink — Tue, 06 May 2008 18:13:02 +0000

The reason that the savings bond and I bond purchases has been restricted is due to some tax planning issues.

Certain capital gains and qualified dividends (i.e., adjusted net capital gains) are taxed at 15%, or 5% for taxpayers in the 15% or 10% tax brackets. Pursuant to the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) and extended by the Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA), the 5% rate drops to 0% from 2008 to 2010. In 2011, these rates will sunset and revert to the pre-2001 rates of 15%, 28%, 31%, 36%, and 39.6%.

Therefore if you are a retiree or prospective retiree, you would want to spend the money out of your taxable accounts if possible during this time. Where savings bonds and I bonds come into play is that the interest is deferred and would not count against your income for these years, allowing you to maximize the use of the capital gains window. Also see this <

By: David Goldsmith

David Goldsmith — Fri, 02 May 2008 23:22:01 +0000

I can only think of one explanation that makes sense to me.

Those entrusted with the responsibility of deciding such things (The Deciders) were influenced, somehow, to get the Treasury out of competition with special interest groups. Corporations and commissioned agents are willing to let the government ‘bottom-feed’ on “individuals with relatively small sums to invest,” while they do their business with the rest of the market.

By: fivecentnickel.com

fivecentnickel.com — Fri, 02 May 2008 15:37:43 +0000

Savings bonds encourage saving. But spending is what drives the economy. So… In addition to aribtrarily sending people checks, why not take steps to discourage saving?

By: Todd

Todd — Fri, 02 May 2008 02:49:27 +0000

Any chance that there is a preference to sell debt to people who won’t exercise the debt’s tax advantages ? Just a thought.

By: Anonymous

Anonymous — Fri, 02 May 2008 02:21:09 +0000

May well be sooner than 3 weeks plus. I bought mine at Wachovia on the 24th and they came today , May 1, dated April 28

By: jim

jim — Fri, 02 May 2008 00:27:50 +0000

I’m a little concerned about it too but there isn’t much we can do about it, the whole process seemed just so disorganized. Oh well, I guess we’ll both find out in three weeks plus…

By: cheo reom

cheo reom — Thu, 01 May 2008 22:37:00 +0000

Jim, I’m clueless behind the reasoning too but, like you, I was curious how low the Treasury would drop the fixed rate…….and they can’t go much lower than that!!

I’m glad I locked in that rate two days ago (or at least I think so…I don’t even have an application to prove for it really)

I’m anxious to get those paper bonds delivered to make sure my purchase went through, or else I don’t know how to argue just with a generic transaction receipt that says “Bonds Purchase.”