By David Enna, Tipswatch.com
Update, Jan 31, 2025: I noted in this article that I was going to make a “test” I Bond purchase in January 2025 to see if it would trigger a purchase limit because of gift box deliveries in 2024. The transaction was scheduled for Jan. 29 and the money was withdrawn by the Treasury on that date. A day later, TreasuryDirect showed the I Bond in the account, dated Jan 1 2025. So it all worked without a hitch.
Update, Oct 24, 2024: Read through the comments section below for a fascinating discussion on client conversations with TreasuryDirect, which seems to be settling on a clearer “party line” for investors.
For example, this is from reader James S:
Well, I had another call with Treasury Direct this morning. I explained my situation very clearly (my significant other and I each have four sets of Ibonds in gift boxes, each at $10,000, for a total of $40,000). I asked if there would be any repercussions if ALL of those gifts were delivered now and the answer was no, it is perfectly acceptable to deliver all gift Ibonds now. The only restriction is that the recipient would NOT be able to make any further purchases this year.
The reasoning given is that they are “switching to a new system” and want as many gifts delivered as possible before the switch. I assume this means gift Ibonds are going to be phased out.
The same sort of thing can be seen in the Bogleheads thread, with the great majority of people reporting that TreasuryDirect states it will allow gift-box deliveries over the purchase limit: For example:
I also contacted Treasury Direct today. The rep I spoke to was R***y who communicated the following to me:
- There is no limit to how many bonds that can be delivered to a recipient.
- The $10,000 limit references that each bond is limited to $10,000. There is no limit to how many bonds can be delivered to a recipient, even if the recipient has already purchased $10,000 in their own name.
- R***y was aware that I had 3×10,000 bonds sitting in my gift box waiting for delivery to my DW. I was instructed to deliver all the bonds to DW
- I asked if I would be subject to any repercussions or penalties for delivering all the bonds at once right now. I was told “no”.
- I asked if any changes to rules or communications could be expected in the near future to provide better clarity. I was told, “possibly” and something along the lines of “sure as technology changes permitted”
What this means: All indications are that your gift-box purchases can be delivered now. That action makes sense because if you wait until 2025, the delivery will count against the recipient’s ability to purchase additional I Bonds in 2025. So you will have more flexibility if you deliver the I Bonds in 2024.
Am I certain about this path? No, sorry, but that is what TD is indicating.
What I did: I volunteered to be a lab experiment and just went in and delivered our two gift sets of I Bonds, purchased in April and September 2024. The process was quite easy, and I was also able to change the I Bonds to our standard “with” ownership after the deliveries.
When you do this: You will obviously need to know the account number and password for each account, and you will need to reenter the recipient’s account number as the last step before submitting.
————————————————–
TreasuryDirect this week began sending out emails to investors holding U.S. Series I Savings Bonds in gift boxes, suggesting that these bonds should be delivered “as soon as possible.” Here is what investors are seeing:
At first, this odd email set off “phish” alarms for recipients because it is highly unusual for TreasuryDirect to suggest urgency for delivery of gift savings bonds. That confusion caused TreasuryDirect to post an equally unspecific explanation that this is an authentic email. That page says:
The US Treasury is asking customers with undelivered bonds to deliver them to their recipient, who have ownership of the bond(s).
Something clearly is up. Some investors fear an end to the gift-box program is looming. (Could be right). Some fear I Bonds will be eliminated entirely. (Not likely). Many are just plain confused. (Understandable). See the Bogleheads discussion.
The TreasuryDirect rules governing gift-box purchases have always been clear that the purchase does not apply to the purchaser’s limit of $10,000 per person per year. It has been less clear, but always assumed, is that the amount will apply to the recipient’s purchase limit in the year it is delivered.
Bonds purchased or transferred as gifts will be included in the computation of this limit for the account of the recipient for the year in which the bonds are delivered to the recipient.
However, does that mean delivery of the I Bonds counts against the $10,000 cap, meaning the recipient could not purchase additional I Bonds? But the recipient could still receive gifts above the cap?
I just got off the phone with TreasuryDirect representative Vanessa. Here is the conversation:
Is this email suggesting that investors should quickly deliver any I Bonds in gift boxes? Does the email mean to suggest there is urgency to do this?
We would like the gift savings bonds to be delivered.
Does this mean that deliveries in 2024 will be allowed to people who have already purchased I Bonds up to the purchase cap?
If you wanted to, you could wait until January 2025 to make the delivery.
But it would be acceptable to make the delivery in 2024 to someone already at the purchase cap?
Correct. We would like the gift box purchases to be delivered.
I have heard that changes are coming to the gift box program? Could it be eliminated in the future?
I am not sure about that.
This information is similar to what Jennifer Lammer, a reliable financial blogger on YouTube, got from TreasuryDirect yesterday:
What do we do now?
I haven’t yet received the gift-box email, but that isn’t unusual. Lammer’s source said the emails are being sent out in waves. I consider the email a monumental failure in communication by TreasuryDirect. It is vague and unspecific, while also seeming to recommend urgency.
So … I think I want to ponder this situation for a few days. If the “deliver now” information continues to seem to be correct, I would go ahead and deliver my two sets of gift-box (husband and wife) purchases before Oct. 31. Delivering in 2024 instead of January 2025 makes sense because it leaves the door open for additional I Bond purchases in 2025.
Something could be changing at the November 1 reset, and that would explain the implied “urgency” in the TreasuryDirect email. We could see an announcement that the gift-box program is ending, along with further instructions.
I do not think that I Bonds will be discontinued, but I have seen speculation on that.
In my wildest imagination, I could see two things happening on January 1:
- The gift box program is ended, similar to the end of the paper I Bond program we saw in late August.
- The Treasury raises the purchase limit for savings bonds to $20,000 per person per year, which would be a long-overdue improvement.
Is that likely to happen? Probably not. So in the meantime, I will watch for additional information and plan to deliver my gift-box purchases later this month. And then hope I don’t get a slap on the wrist.
I will update this post or write an update if I see additional information.
———–
• Confused by I Bonds? Read my Q&A on I Bonds
• Let’s ‘try’ to clarify how an I Bond’s interest is calculated
• Inflation and I Bonds: Track the variable rate changes
• I Bonds: Here’s a simple way to track current value
• I Bond Manifesto: How this investment can work as an emergency fund
* * *
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David Enna is a financial journalist, not a financial adviser. He is not selling or profiting from any investment discussed. I Bonds and TIPS are not “get rich” investments; they are best used for capital preservation and inflation protection. They can be purchased through the Treasury or other providers without fees, commissions or carrying charges. Please do your own research before investing.
Treasury Inflation-Protected Securities 
David, can you update everyone on how your purchase for your accounts (not gift) went today? Thanks
I will be posting a brief article on Sunday morning. The process appeared to work just like normal and most likely it did. But you never know.
Excellent
I noticed on Bogle that it may be advisable to purchase for ones own account before having someone else gift/deliver to you? If done the other way with gift delivery first that will count toward that recipient’s annual allotment and may preclude that recipient buying for his/her account? I think that is what I read…we are waiting until Sunday!
Yes, I think the best strategy if you have remaining gift box I Bonds is to deliver them AFTER you buy your regular $10,000 allocations in 2025. They very well may count against the purchase limit if you deliver them first.
Agree with your coment of 20 December. TD seems very confused. Following up on my November call, my wife called TD last week. After speaking with a supervisor, the representative clearly stated that the only consequence of delivering more than $10K in ’24 to a single recipient would be a prohibition on the recipient purchasing in ’24 and future years based upon the amount delivered; i.e. if $50K were to be delivered then the recipient could not purchase for five years. The opposite of the counsel they provided me in November . . . . .
I called yesterday and spoke to a rep with limited English skills. He told me I did not need to worry about the (purchase/delivery) limits for this year, and that I needed to make the deliveries this year. He specifically said that if $20K were delivered this year, the recipient would not be able to buy any I-Bonds in 2025, but that they >would< be able to buy in 2026 (contradicting what the supervisor told you).
He seemed confused by my repeated question of what would happen if the bonds were left in the Gift Box until next year.
Most helpfully, he told me that “You need to do what is good,” which I suppose aligns nicely with the Christmas/Hanukah season, and is advice that I will try to follow as I live my life. I didn’t really see any downside, so I delivered the two sets of gift bonds in my and my wife’s accounts.
I just called TD (Dec. 20, 2024) and got the same answer as many folks — to deliver even if the recipient has purchased 10K this year — but they cannot purchase more this year. They will be able to purchase in 2025. The rep used the phrase “because it’s gifted” as an explanation for why the limit can be exceeded in 2024, which was interesting as it disagrees with some of the wording in the regs. But she seemed to know these answers right away with confidence. I didn’t have the option to record the call on my phone, unfortunately.
Jess, are you sure about that?
I spoke with TD and they said if the person had already purchased their full allotment of 10k and then you gifted them more than that, then they would be blocked from buying more in the future (ex — if you gifted them 10k this year, and they had already bought 10k this year, then they will be blocked from buying anything in 2025).
I asked about delivering over $10K this year, and she replied yes – go ahead…but the recipient couldn’t purchase more until 2025. I asked, “So they can buy in January 2025?” and she said yes.
Jess & Minnesota, great information that just continues my feeling that TD doesn’t really know what its policy is. On Jan 2, I plan to log in and see if I can purchase more I Bonds in my two accounts. Even if that succeeds, it might not be in line with whatever policy TD intends to set.
My attempt to get a response in email was a dead end. I wrote to the address sending the mysterious ASAP emails (Research@fiscal.treasury.gov) and received this reply: We are currently doing some clean up on our unmonitored mailbox. The best way to help with your question is going to be to give us a call at 844-284-2676 from 8 AM – 5 PM ET and speak to one of our agents.
I took action based on what I was told by an agent. Hopefully we can still buy in January.
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David:
Following up – – We finally got “the email” a bit ago. I called T Direct and specifically asked them if there would be any consequences whatsoever for delivering for example $100K of I Bonds this year to a single recipient. They said none, except the recipient would not be able to purchase any more this year. They specifically said it would not impact future years. They had no knowledge of any forthcoming written guidance on point. In answer to my follow-up question, they said there would be no consequences for not delivering per their request, but strongly urged delivery. Interestly, they said that the system on occaision will not allow delivery of over $10K in a year and in that case to try again. Fascinating. I will now reconsider whether to take any action.
Any new insights from your perspective?
Thanks and regards.
GVE
David:
Thank you for the most recent update.
Regards.
GVE
In posts on Bogleheads someone asked why on earth wouldn’t you deliver gift bonds ASAP? Speaking for (evidently) the VERY small minority, we bought a savings bonds for each grandchild’s birthday. Our intention was to give each of them all their bonds on their 21rst birthday. Why didn’t we just have the parents make their own account with a minor’s account and put them in there? Because we don’t trust the parents to not have some financial emergency and “borrow” the money – with all good intentions to pay it back of course but you know how that goes. Right now one grandchild is 19 so I guess we could ask her to make a treasury account except she doesn’t have a savings or checking account. The others are all under 18. So we are going to wait at least a month longer to see if they specify what “soon as possible” means and what happens if you don’t. I hate to have to hand these over to the parent’s control but we may not have a choice. We sure won’t buy any more gift bonds. Just open multiple savings account & deposit birthday money there I guess.
I have heard this same reasoning from other readers who are not ready to deliver I Bonds to underage relatives. Now we just have to wait to see what gift box rules TreasuryDirect decides to implement.
Possession is x percent of the law. Bought paper bonds for college years ago when children were 1 or 2 as I recall. Filed tax returns to change accounting to accrual and kept a copy for y number of years…Interest charged as income in each year and every year was under the personal deduction so no taxes ever due. Handed out some bonds beginning of each college year as part of budgeting for same. Framed that early tax return for each child and was my (additional) gift to them. Ibonds would be no different.
David:
Even though we have now recieved the email in question, we are reluctant to immediately deliver. The regulations seem very clear that “The principal amount of . . . bonds that you may acquire in any calander year is limited to $10.000 . . .” 31 CFR 363.52(a) (emphasis added) and that “Bonds . . . transferred as gifts will be included in the computation of this limit for the account of the recipient for the year in which the bonds are delivered . . . ” 31 CFR 363.52(b) (emphasis added). Further, the feds “reserve the right to take any action . . . deem[ed] necessary to adjust the excess, including . . . remov[ing] the excess bonds from your TreasuryDirect account . . . ” 31 CFR 363.52(d). Based upon these regulations, in the absence of specific overriding guidance, delivering more than $10,000 a year would seem risky. What risk do you see in not immediately delivering?
Many thanks for all of your work.
GVE
I don’t see a any risk in not delivering, unless your intended recipient doesn’t yet have a TreasuryDirect account. That would need to be resolved ASAP. Also, we don’t yet know how the delivery will affect future purchases, so if it doesn’t, then delivering in 2024 would be the smart move. If it sets off future limitations, then it is a toss-up on when you would want to do it.
Many thanks. This is very interesting and, as you say, mysterious.
Received gift box delivery email from TD. So call TD and spoke with TD representative and ask same question:
1. Can I deliver all my gift box I bonds to a recipient who has already max out the purchase cap limit for I Bonds this year?
She said YES there is no cap on how many I bonds gifts you can deliver to a recipient. However Bonds purchased or transferred as gifts will be included in the computation of this limit for the account of the recipient for next year.
What that means is, let’s say (according to email from TD) I go ahead and deliver 20K of I bonds to my wife in 2024, she will not be able to purchase any I bonds until year 2027, since 20K of gift I bonds will be counted toward purchase cap for year 2025 and 2026.
Also TD is making changes to the gift box, such that if you purchase gift I bonds starting 2025, TD will deliver gifted I bonds immediately to a recipient. You will not be able to hold gift I bonds.
Let’s say, Wife purchases 10K I bond in the year 2025, and you also purchase a 10K gift I bond for your wife in 2025. TD will immediately transfer the 10K I bond that you purchase for your wife. What will happen is that your wife will not be able to purchase any I bonds for herself until the year 2027, since your gifted 10K I bonds will count as a purchase cap for the year 2026.
According to the TD representative these changes are coming soon, not sure when.
Each day we get a little more information. What we really need is for TreasuryDirect to provide full information as soon as possible. Will all gift box items be delivered automatically beginning in 2025? (Of course, the recipient would need to have a TreasuryDirect account to do that.) If you can actually continue to buy gift I Bonds for a person who has already purchased the limit, there is potential again for stacking up multiple purchases, while then incurring the temporary ban on purchases. Hurts my brain.
According to TD representative, TD is making changes to block purchase of I bonds for a recipient for the years that gift I bond resulted in purchase cap.
It will be interesting to see how this would work when purchasing gifts for someone without a TD account. How would they immediately deliver the gift? Or perhaps it will not be possible to purchase such a gift?
What you’re saying makes a lot of sense. Your basically going to be in the same position, with the same ability to purchase I-bonds if you delivered the gift bonds when you originally intended before this e-mail went out or delivered them know.
Example, I used up 10,000 limit in 2024 and also in 2024 bought 4,000 I-bonds in Wife’s gift box. I was going to deliver them in Jan 2025 and then I would be able to buy 6,000 more in 2025. I delivered the 4,000 to my account now (Oct 24) per the e-mail and I should be in the same position – able to buy 6,000 in 2025.
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Seems like most comments so far focus on gifts purchased by spouses for their partners.
My issue is that my gifts were purchased for my kids. Multiple gifts for each. No intention to deliver them while I am alive, unless I live for 30 more years, which is unlikely. BUT not impossible.
So my intention is to do nothing, whether I receive that letter or not.
My worry is that somehow TD will renege on the original terms of the purchase.
What’s the chances of this happening. Could they force me to deliver the gift box gifts early. This is undesirable for several reasons, not all mine.
It’s impossible to say. TD potentially could set a date for clearing out the gift-box I Bonds, and it definitely could shut down the program for new purchases. These deliveries could potentially be taxable gifts to your children if the amounts are over the gift limit, so there would be consequences. Maybe you’d have the option to return them to your account. Hope we will know by the end of next week. (Or maybe nothing at all will happen and we just got a confusing head-fake from the Treasury.)
Ok, I’am a lab experiment as well. Delivered all bonds in Gift box even though accounts were maxed out to 10,000 limit. We will see what happens.
Did they go through?
Yes, no problem
It could happen. Treasury seems intent on clearing out the gift-box items, but you know that at least 25% of people won’t do it, for whatever reason. The Treasury may be more interested in stopping future gift-box purchases, and may not care if you continue to hold.
Another reason to stay away from TD. I will be selling off my more current I bonds this year and winding down my other I bonds closer to maturity.
TreasuryDirect’s miscommunication continues with a new banner on the homepage that says to receive the current I Bond rate “you must complete your purchase by 11:59 p.m. Eastern Time on Thursday, October 31.”
When they likely end up announcing the new rates on the 31st, they seem inclined to repeat their confusing past-tense messaging from last April that says the old rate was available until a time in the future that has not yet occurred.
I posted a warning about this yesterday on X. Oct. 30 should be the last day to place an order.
It’s odd that TD only this year starting announcing the last business day of the calendar month as the purchasing deadline. When they had record demand two years ago, they correctly announced that the deadline was October 28 at 11:59 pm. In 2023 it was also the second-to-last business day of the month (April 27 and October 30).
Were all in the dark until Treasury Direct, after getting inundated with questions, provides clarification. it’s possible you can interpret “as soon as possible” in different ways:
Yes, that is what it could mean, even with TreasuryDirect reps telling people they can go ahead and deliver. We may or may not get more clarification.
If there is that much demand for I-bonds, and given the fed’s increasing debt load, wouldn’t it be wise of them to raise the limit?
One thing to realize is that I Bond purchases fill only a small portion of the Treasury’s credit needs. In the biggest-demand months, at the most, the Treasury sold about $7 billion in I Bonds. This week’s 5-year TIPS auction is set at $24 billion.
I imagine that there was a large influx of gift box purchases between Nov-Apr last year as people accumulated the favorable fixed rate. I would be unsurprised to learn this is straining their antique computer system.
If I had to guess, they are going to remove the purchase cap and discontinue the gift-box program. They already removed the paper I-bond purchases (very sad!) as a way to decrease costs and streamline operations, so just removing the cap and getting rid of the gift box program jives with the direction they seem to be moving.
I totally agree that their e-mail is an utter failure in communication. What do they expect people to do with such limited info? I’d rather wait than risk losing $10k of bonds at the good rate because I exceed the purchase cap.
I doubt they would completely remove the cap, because that would open the door to “rich people” abuse of a program meant for small-scale savers. But it is time to double or triple the limit.
And index that limit to inflation, for crying out loud.
I wouldn’t put much stock in the statements of front-line customer service representatives. They’re probably much more familiar with people’s bonds having been lost in the mail or being locked out of their accounts. The gift box program is niche.
As I argued over at Bogleheads, I think a careful reading of the regulations indicates that 1) there is a purchase limit; 2) gift deliveries impact the recipient’s purchase limit; and 3) since gift deliveries are themselves not purchases, deliveries in excess of $10,000 are permissible.
It’s already been established that it’s possible to deliver > $10,000 in gifts to a single recipient in a single year. And gift deliveries can happen 1) without the giver knowing if or how much the recipient has already purchased, and 2) without the prior knowledge or consent of the recipient, so as a practical matter it doesn’t seem possible to enforce a limit.
I’ve read your ideas on the Bogleheads forum, with interest. I have no idea if you are correct per the vague TD rules, but in practice it does seem so, and now lots of people will be doing exactly what TD suggests: Delivering as soon as possible.
Definitely appreciate your thoughts on the matter, but personally, I wouldn’t be quite so confident about what is “established” relative to the actual rules.
It’s always seemed like the Treasury has taken a very soft approach to enforcement. Anecdotes seem to suggest that the harshest response to a rules violation is usually a stern letter threating possible ramifications but they usually don’t even require the error to be corrected. Just don’t do it again…
You’re correct about difficultly of enforcing rules on gift delivery. What are they going to do if 4 different family members decide to deliver $5000 each in I bonds? So they let these minor violations(?) slide. But this is very different from a husband and wife who each deliver $50,000 to each other in a clear and obvious effort to evade purchase limits. I would be shocked if this was allowed.
And it’s also surprising to me that some people seem to be so confident about their interpretation of vague statements, such as an email saying “deliver as soon possible”. I mean, you can argue that your interpretation would hold up in court, but you’re not going to court. The Treasury interprets their own rules and if they say, “yeah, that’s not what we meant” then ultimately they’re the judge and you don’t have much in the way of recourse if they decide you violated the rules.
Agree on your last paragraph, with special concern about the word “possible.” Is it really “possible”, in the view of TreasuryDirect, to deliver gifts if it is against their rules (if it is in fact against their rules)?
It is sad that we are parsing unclearly worded rules and conflicting statements from customer service reps. I hope there’s a journalist out there who picks up on this story and and pursues it with PR people or higher-level contacts at Treasury who are actually in a position to authoritatively clarify what is actually going on.
I mean it is “established” in a de facto, empirical sense. That is, multiple folks have reported that they have in fact been able to delivery in excess of the $10k purchase limit without so much as an e-mail (which as you note, seems to be the standard response when an individual exceeds the purchase limit).
I’d place less emphasis on e-mails and verbal statements made over the phone and more emphasis on the Code of Federal Regulations, which is the authority TD needs to rely upon when taking action. Agencies are generally quite risk averse when it comes to interpreting and acting on these regulations. If there’s any ambiguity or confusion, I would be quite surprised if they took a hard stance that’s not clearly supported by the regulations.
TD has now put themselves in an even weaker position to attempt to enforce any supposed limit on gift receipts with their e-mail and the fact that folks over at Bogleheads are calling and sometimes being explicitly told that they should deliver more than the annual purchase limit.
David: Many thanks for this post. I was previously unaware of this development. To again quote Reagan re: the nine most terrifying words in the English language “I’m from the government and I’m here to help.” My wife and I have $300K in our respective reciprocal gift boxes, such that we can deliver S10K per year for 30 years. If these jokers now take the view that there is no annual limit on delivery, I will not be pleased that we limited our purchases based upon what we thought was an annual limit on delivery.
I just completed a gift box purchase about 5 minutes before I saw this post of your website not knowing anything about it. I had been planning on making this purchase for a couple of weeks (before the change in rates at the end of the month) and I was expecting to be done with Treasury Direct for the rest of the year. Another complication that I don’t need. I really wish they were not so vague. I have been dealing with Treasury Direct for over 30 years (back when transactions were done by snail mail). I have avoided doing any transactions with them except for I Bonds for years and will continue definitely continue operating that way.
I think a lot of people had your same plan, to buy gift-box sets at the end of October. (I bought mine at the end of September or I would be doing it next week.) Your purchase, though, should turn out fine.
Here is a thought, not inside information, but you have to consider, why be vague?
Like it was said above, it was never meant as a way around the purchase limit.
As a way to close this “loop hole” define a holding limit before delivery of 1 yr or less, maybe even less than one rate cycle or 6 months.
Hopefully, like has been suggested raise the limit of ibonds you can buy or gift.
One other thought is they also want to change the “$25 paper ibond way” of calculating interest, to something that is easier to work with for “any” denomination of ibond.
Interestingly, the email came from research@fiscal.treasury.gov . If you search for that email, you find this page: https://www.treasurydirect.gov/research-center/
This page talks about surveys they send out: https://treasurydirect.gov/indiv/research/email
I notice now that I got an email in June from them stating:
The US Treasury is building a new experience for customers to buy and manage government securities and is seeking input on the experiences from current customers. If you are interested in participating in research that will inform and improve the future of buying government securities, please take this opportunity to participate in the survey administered by SurveyMonkey or a user panel through UserTesting.Com .
SurveyMonkey participation URL https://www.surveymonkey.com/r/W7KJ5CF
Please note that the US Treasury has not provided any information to SurveyMonkey or Usertesting.com, and that you may simply ignore this invitation if you do not wish to participate.
Thank you for your interest in helping improve the design of our products for the public. We look forward to hearing your feedback!
If you have questions about the validity of this e-mail, please visit https://www.treasurydirect.gov/indiv/research/email/
So, maybe this is a research test to see whether they can shrink those gift boxes, or whether people have inadvertently left gifts in there. Or maybe those June surveys have led to some changes that they plan to implement. Or maybe that the Research Department is the only one set up with a mass-mailing system to reach all of its customers. Either way, I’ll wait until I get the email and get clarification before doing anything.
This page clearly states: “The gift counts for that person’s limit in the year in which they get the bond.“
But they also state: “We count the limits by the Social Security Number of the first person named on the bond.” and “A given Social Security Number or Employer Identification Number can buy up to these amounts in savings bonds each calendar year: $10,000 in electronic I bonds.” So, I have broken that limit by buying both a bond with my SSN and having my wife buy a gift bond with my SSN in the same year. The intent was to deliver it in a future year in which I didn’t spend $10K myself. Obviously, the Gift Box was a little sanctuary in which purchase limits didn’t get aggregated against a SSN. I wouldn’t be super quick to assume that the limits won’t be applied by the rules folks outside of what the Research Department thinks.
My hunch is that Treasury Direct realizes that the yearly demand for I-Bonds is greater than $10K a year. The gift strategy is proof of that, and needlessly complicates the system. I hope they raise the limit and probably reduce the amount for gifts. They simplified the system by dropping paper I-Bonds earlier this year.
100% agree this is the best path forward
I’m fairly new to this gift box thing having purchased a first set earlier this year for myself and my husband (already purchased our limit straight out for the year) and have scheduled purchases of two more gift sets before the end of the month. Neither myself nor my husband have gotten the emails. Maybe the wave just hasn’t reached us yet, TD got smart and paused the wave, or we haven’t had bonds in our gift box for very long (only since April). Anyhow I went poking around on the TD sight, doing my own research and found this statement “The gift counts for that person’s limit in the year in which they get the bond.” Is this new, or has it always been there? Here’s the link to the page: https://www.treasurydirect.gov/savings-bonds/how-much-can-i-spend-own/
The savings bond gift box has been available for years, but really became a “thing” in late 2021 when the I Bond variable rate rose to 7.12% and an article on TheFinanceBuff.com delved into the strategy. (https://thefinancebuff.com/buy-i-bonds-as-gift.html). Since then, the accepted rule was that the a $10,000 I Bond gift (plus earned interest) in any future year would complete the recipient’s purchase cap. That was accepted. Now, this TreasuryDirect email explicitly asks the investor to deliver the savings bonds “as soon as possible.” Everyone is confused, even the customer service reps at TreasuryDirect. I am hoping this will settle out in a few days, or when we get a “dramatic” announcement from TreasuryDirect.
I received the Deliver Your Gift Bond email. I called TreasuryDirect. I stated I have 4 gift bonds to deliver. I stated the recipient has already purchased the limit in January of this year. He told me it was okay to deliver all 4 gifts.
So that’s what I did yesterday. Delivered all 4.
No issue yet but it’s only been one day. In any event, I have the email and confirmation from calling. My spouse has not received the email as of yet. Just to be cautious I am waiting until she receives it and then will transfer those gifts to me.
So, extrapolating this, I could load up my gift box with as many ibonds as I can afford, and then deliver them tomorrow, thus completely avoiding any annual limit. Bizarre.
With the information we have (not conclusive), that might be risky. Worst case the gifts would redeposited in the granting account?
Boy, what a sh*show by TD.
If the penalty-free, unlimited gift delivery is indeed true as many are speculating and TD seems to have confirmed (to at least some people) this would represent an epic opportunity to buy large amounts of 1.3% fixed I-bonds and replace one’s entire portfolio of lower rate holdings built up over the years and immediately deliver. I’m certain this isn’t TD’s intent, but seems likely to work.
I’m not brave enough to try it yet for fear of penalties, rejected purchases or closing of account.
But I did move up the 2x$10K purchase I was already planning for 10/29 to today. I fear that if changes are in store or they get bombarded with Gift purchases in the next week, something could go wrong with their system; even with already-scheduled purchases. Could be technical glitch or an intentional termination of gift box purchases; even before 11/1. An extra week worth of interest in my savings account isn’t worth the risk.
I might consider additional Gift purchases if there is additional clarification from TD.
I don’t think TreasuryDirect intended to set off a buying spree of gift-box purchases, but it could be an unintended result of this unclear messaging. I am still going to hold out for more information. I intended to deliver one of my sets (I have two) in January 2025 anyway. With a clear message from TD, I’d be willing to move one set now and one in January.
David – With the end of paper I bond issuances, would you recommend paper bond holders to plan to convert their paper bonds to electronic? What I am getting at is that there is probably an employee at BPD that is skilled at it, that might not be there forever. Maybe they are already gone.
While I don’t give investment advice, I will say that I converted all my paper I Bonds to electronic form earlier this year. It is getting more and more difficult to find a bank that will cash them because of fraud concerns.
Thanks. Note: I typed BPD. It is now the BFS, although I liked BPD better.
Thanks for documenting and publishing your phone conversation with Vanessa at TD. Her response to your follow up question about the recipient purchase/delivery limit contradicts everything we know (or thought we knew) about the I Bond gift box rules:
But it would be acceptable to make the delivery in 2024 to someone already at the purchase cap?
Correct. We would like the gift box purchases to be delivered.
My next question would have been why? Why do you want gift box purchases to be delivered? Why do you care about that now?
It may not be as insidious as an upcoming rule change or as incompetent as poor communication. It may be intentional and a function of simple dollars and cents.
Our federal public debt is real. The next I Bond inflation rate is so low that they may want to encourage delivery so that short term investors who used the gift box strategy back in 2021-22 will sell their I Bonds and pay tax on the interest now. You can’t redeem an I Bond from the Gift Box. It has to be delivered first.
That’s the only reason that makes any pragmatic sense. They can’t come out and say they want people to sell their I bonds. But they can say they want gift I Bonds to be delivered, which is the necessary first step of redemption.
Thanks for documenting and publishing your phone conversation with Vanessa at TD. Her response to your follow up question about the recipient purchase/delivery limit contradicts everything we know (or thought we knew) about the I Bond gift box rules:
But it would be acceptable to make the delivery in 2024 to someone already at the purchase cap?
Correct. We would like the gift box purchases to be delivered.
My next question would have been why? Why do you want gift box purchases to be delivered? Why do you care about that now?
It may not be as insidious as an upcoming rule change or as incompetent as poor communication. It may be intentional and a function of simple dollars and cents.
Our federal public debt is real. The next I Bond inflation rate is so low that they may want to encourage delivery so that short term investors who used the gift box strategy back in 2021-22 will sell their I Bonds and pay tax on the interest now. You can’t redeem an I Bond from the Gift Box. It has to be delivered first.
That’s the only reason that makes any pragmatic sense. They can’t come out and say they want people to sell their I bonds. But they can say they want gift I Bonds to be delivered, which is the necessary first step of redemption.
I just got off the phone with Treasury Direct (got through without a wait!). The customer service rep confirmed for me that you CANNOT receive more than $10,000 per year in gifts (I didn’t ask directly, but I assume this means $10,000 combined in purchases and gifts received). The email, as she explained it, is simply a reminder to people to deliver their gifts in a timely manner, as some people are keeping savings bonds in their gift boxes indefinitely and the “recipient” is the sole legal owner of those savings bonds.
And this is the opposite of what my rep told me. Confusion continues
🤷♂️
Thanks, so this supports waiting a little bit to see if there is further clarification before doing anything, as suggested in the blog post.
I called this morning and got the same response as James S. They told me I had to wait until 2025 to do any deliveries if the $10,000 limit had already been reached for the recipient in 2024. I wish they’d get their stories straight so I knew what to do.
James S and all, it’s possible that TreasuryDirect is getting wind of the confusion and sending word to the reps that it doesn’t want excessive gift-box deliveries, even though its email said “as soon as possible.” The party line could be changing this morning.
Well, I had another call with Treasury Direct this morning. I explained my situation very clearly (my significant other and I each have four sets of Ibonds in gift boxes, each at $10,000, for a total of $40,000). I asked if there would be any repercussions if ALL of those gifts were delivered now and the answer was no, it is perfectly acceptable to deliver all gift Ibonds now. The only restriction is that the recipient would NOT be able to make any further purchases this year.
The reasoning given is that they are “switching to a new system” and want as many gifts delivered as possible before the switch. I assume this means gift Ibonds are going to be phased out.
Excellent information, thanks
I gave up on Treasury direct an moved $1M+ out of there to high yield bonds with Schwab. Why you ask; they wouldn’t answer emails unless you had a case number. Additionally, trying to get them on the phone proved to be a Herculean effort. Adios TD.
I have not yet received an email from TD about my gift box bonds.
It seems hard to believe that they would be this urgent in moving them out if they were not going to waive the 10k/person limit (regardless of self-bought or a gift).
In fact, how could some people move them out without violating that limit?
I don’t think it will go away. But I can see them reducing the amount that can be gifted in a single year or requiring you hand over the bonds within a year or less.
I think the Treasury’s original thought when they created this was that you’d gift $500 worth of savings bonds to your niece on her high school graduation. I don’t think they every anticipated a high-net worth couple deferring taxes on an extra $20k for thirty years.
I would like to propose a clarification to this post. Two I-bond purchases of 10K each would not defer the taxes on 20K, it would defer the taxes on any interest earned on the 20K. Taxes were already paid on the initial 20K used to purchase the I-bonds.
My wife and I have been intending to do more gift box purchases–this week–while the I Bond’s 1.3% fixed rate is still in effect before its potential re-set on November 1.
Since TreasuryDirect’s mass e-mail about gift box purchases (and delivering them “as soon as possible”) is so incredibly vague (to the point of incompetence, in my opinion, creating vast confusion where none was ever necessary), we’re going to go ahead and proceed as planned to make the gift purchases.
Then perhaps–or perhaps not–TreasuryDirect will issue further clarification (which it should have done in the first place) about how “soon” is “soon enough” to deliver, and whether the delivery of gift purchases to a recipient does or does not count toward the $10,000 annual purchase limit which has always been understood to apply to the recipient’s own account, and whether delivery of large amounts of gift bonds, all at the same time, will or will not trigger any retaliatory action by TreasuryDirect’s systems for having exceeded some dollar limit.
Totally bizarre.
I’m planning to do the same thing.
How much better it would have been if Treasury’s mass e-mail had said something like this (if in fact this really IS the policy, a point on which Treasury’s own vague emails have now cast doubt):
Dear TreasuryDirect customer:
This is just a friendly reminder that you are holding I Bonds in your account’s Gift Box.
While those bonds are the legal property of the person(s) in whose name(s) you bought them, the money in the bonds can’t actually be accessed by those persons until you “deliver” the bonds from your Gift Box to the TreasuryDirect account(s) of the recipient(s).
Please bear in mind that the Gift Box option is available only for individual accounts. Trust accounts and other “entity” accounts can neither buy nor receive gift bonds.
Delivered gift bonds count toward the annual purchase limit in the recipient’s account for the year of delivery. Therefore, the maximum I Bond gift amount you can deliver to any recipient in any single calendar year is $10,000 (the standard purchase limit applicable to every TreasuryDirect account) minus whatever I Bonds the recipient him/herself has already bought in that account for that same calendar year. Once the recipient’s own purchases for that year, plus any gift I Bonds delivered to the recipient’s account, have reached the $10,000 annual allowance, no additional I Bonds can be added to that account, by gift or direct purchase, for the rest of that year. Subject to that annual dollar limitation, however, you are free to deliver your gift bond amounts at any time of your choosing.