The IRS has announced a new way for taxpayers to receive their refunds. Instead of receiving cash taxpayers will be able to receive up to $5,000 in US Series I Savings bonds. Does this sound like a way for government to keep funding its massive stimulus or way to help the middle class invest?
The way it works is you can request up to $5,000 in savings bonds which will dealt in multiples of $50. So if your refund is $4010 dollars say, then the remaining $10 dollars will need to be put into a bank account (anything left after dividing your refund by $50).
To elect to receive savings bonds, you will select this option on Form 8888 which has instructions for you to follow. Now the big question is this a good investment? Well, the answer is it depends. US I Savings bonds typically have a low return on investment but are indexed with inflation. Therefore, if the massive Federal spending and borrowing starts to push up inflation, then your savings bonds will be a good hedge against inflation. However, if inflation remains calm, you might find better uses of your money in terms of an investment. For advice it is best to speak with your investment adviser.
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