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Turning Your Tax Refund into Savings Bonds
Posted on March 2nd, 2012 By: Alison
Wondering whether to spend or save your tax refund? If you do plan to save it, knowing whether to put it towards a new home, your retirement or your child’s education can be a difficult choice. Some experts say it may be a good idea for you to consider using your state and federal tax returns to grow your nest egg by putting it towards a purchase of US Savings Bonds or Treasury securities. It’s a very low-risk savings option for families.
An easy way to turn your refund directly into a Treasury savings option is by using Form 888 called “Allocation of Refund”. You can download it or obtain it from your tax preparer. You can purchase these savings bonds for as little as $25. You can manage your securities through TreasuryDirect, which is the Treasury Department’s secure, online system. Opening one of these accounts is free.
The Treasury Department says you’ll need to take a few steps to get started:
1. Have your Social Security number, bank routing number, checking or savings account number and email address handy.
2. Go to www.treasurydirect.gov.
3. Click on the TreasuryDirect link under “Open an Account” and fill out the online form.
4. Once you’ve completed and submitted the form, you’ll receive an email with your account number.
You can let your tax preparer know you want to purchase a savings bond or security and you’ll quickly be turning your refund into savings.