My solution: Double the purchase cap to at least $20,000 a year.
By David Enna, Tipswatch.com
Last week, TreasuryDirect again sent emails asking holders of savings bonds in gift boxes to deliver them as quickly as possible. I have written about this in the past (here, here, and here) but this email seems to step up the urgency.
The gift box program is used almost exclusively by investors in Series I Savings Bonds, a highly attractive, very safe inflation-linked bond. For more on gift box basics, read this from TheFinanceBuff.com.
I didn’t receive the email, because I delivered all our gift box I Bonds in 2024, the year they were purchased. But readers have sent me the text (you can read the full email and explanation here). Highlight:
Dear TreasuryDirect Customer,
It’s time for some spring cleaning! That includes clearing out your TreasuryDirect gift box by delivering purchased gift bond(s) to your intended recipient. We encourage any TreasuryDirect customers with undelivered gift bonds to deliver them promptly after purchasing so your recipient can access and manage their gift now. …
While you can only deliver one gift bond at a time, there is no limit to the total amount a recipient can receive. However, once they have received $10,000, they should not purchase additional savings bonds that year because gift amounts are applied towards the purchase limit.
Note the wording here: 1) You can deliver only one set at a time, 2) but you can deliver as many individual sets as you want, at any time, and 3) after the delivery, the recipient will not be able to purchase additional savings bonds that year.
In other words, the recipient must make any traditional I Bond purchase — up to $10,000-per-year purchase cap — before receiving the gift box deliveries. After the purchase, the door is wide open for deliveries of unlimited amounts.
This policy, which I Bonds investors have known about anecdotally, appears to create a giant loophole and allows investors with a trusted partner to buy and deliver unlimited I Bonds in one year, one month, even one week.
TreasuryDirect has created an FAQ on the gift box program, which more or less clarifies implications of the email:
Is there a limit to how many gift bonds I can deliver to recipient(s)?
You can only deliver one gift bond at a time. There is no limit to the amount a recipient can receive; however, once they have received $10,000, they should not purchase additional savings bonds that year because gift amounts are applied towards their purchase limit.
Can my recipient cash out gift bonds over the annual purchase limit once they are deposited into their account?
There is no limit to the amount of bonds a recipient can cash out from their TreasuryDirect account, regardless of how the bonds were acquired. Bonds can only be cashed out if it has been at least one year since the bond was purchased.
Is there a deadline for delivering gift bonds?
Delivering gift bonds proactively prepares you for upcoming enhancements and enables your recipient to experience the full benefit of your gift.
Is delivering my gift bonds mandatory?
You are encouraged to deliver gift bonds now to ensure you are prepared for coming enhancements and so your recipient can experience the full benefit of the gift bond.
What happens if I don’t deliver my gift bond(s)?
Gift bond recipients are the sole legal owners as soon as the bonds are purchased, so holding undelivered gift bonds introduces potential complications. While no changes are currently being made to the gifting process, delivering your gifts now reduces the risk of possible issues in the future.
Will there be changes to the gift bond program or is it being eliminated?
Future changes to the gift bond program are still being determined. However, there is no impact to your participation at this time. Stay tuned as more information becomes available on how we’re enhancing your customer experience.
My interpretation
For well over a year, TreasuryDirect has been hinting at major changes to the gift box program and possibly its entire savings bond purchasing system. This email steps up the urgency with a plea to clear out all gift box savings bonds as quickly as possible.
At the same time, it opens the door to “abuse” of the system by allowing unlimited gift box purchases and immediate deliveries. OK … it really isn’t abuse since the Treasury is clearly allowing it as long as deliveries are made quickly (there is a 5-day waiting period). With this plea, Treasury has backed its way into an unintended consequence.
The urgency is strange since Treasury has been hinting at upcoming changes for 18 months, even before President Trump’s election in November 2024. Did the administration turnover delay the changes? Are they now ready to roll out?
A bit of history
Investors never really noticed the gift box program until fall of 2022, when the I Bond had a variable rate of 9.62% and was about to transition to a rate of 6.48%. Those I Bonds had a fixed rate of 0.0% but the composite rate of 9.62% was extremely attractive (the 1-year T-bill was yielding about 4.5%). I Bond mania was in full swing and the gift box program became a viable strategy for investors with a trusted partner.
At that time, the consensus view was that gift box purchases of $10,000 could only be delivered one at a time, each year, and any delivery would lock the recipient out of additional purchases or gift box deliveries in that year. Some investors bought 10 sets in 2022 and it appeared they would have to sit on those 0.0% I Bonds for delivery over the next 10 years. Once TreasuryDirect opened the floodgates with emails urging deliveries “as soon as possible,” those investors could immediately deliver and redeem. The loophole sprang open.
I was never a fan of using the gift box strategy unless the fixed rate was historically high, because the fixed rate is permanent. The only time I used the strategy was in 2024, when the I Bond’s fixed rate was 1.30%. Later that year, I delivered all the gift box swaps and figured I would never again use the strategy.
Common-sense solution
Why do investors use the gift box strategy? Most of the time, these are fairly wealthy people looking to build a stockpile of inflation-protected cash in a very safe investment. For them, the $10,000 per year purchase cap is too small to make a difference in their asset allocation. So they craftily resort to the gift box.
Here’s my solution:
- The Treasury should immediately raise the savings bond purchase cap to $30,000 a year — equal to the cap that existed from 1998 to January 2008. Adjusted for inflation since January 2008, that cap would be $46,000 today.
- It should eliminate the gift box program or alter it in a way that allows only small purchases and controlled deliveries. Gifts from grandparents to kids were nice in the past when Treasury issued paper savings bonds, but less accessible in our new age of electronic investments.
As a compromise, I’d accept raising the purchase cap to $20,000 a year — $40,000 for a couple. That would make the I Bond more attractive for sophisticated investors. And it would create an expanded opportunity for investors without a trusted partner, who are essentially locked out of the gift box strategy.
And another thing … TreasuryDirect, please be upfront about future changes you are planning. Let us know in clear terms what to expect.
And a reminder … If you are planning a purchase of the April-issue I Bond, make sure to place your order at TreasuryDirect no later than Tuesday, April 28. Purchases “completed” on April 30 will be May-issue I Bonds. From TreasuryDirect:
I expect we will see the new fixed-rate / composite rate announcement Friday morning about 10 a.m. EDT. I will be posting an update.
Did you get the gift box email? If so, what are your plans? Would you consider using the strategy in 2026 to lock in the 0.9% fixed rate?
• 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 
I’m opposed to eliminating the gift box in favor of (for some) a too paltry $20k or $30k yearly limit, which can take a long time to build a significant (for some, especially singles) position. And why not $100k, or $200k? I see the gift box as a savings vehicle for individual savers (not suitable for institutional investors), who fear their savings could be ravaged by inflation, with TIPS having many disadvantages. A US debt crisis with debasement (likely in our future?) could be a crushing blow for retirees. Sure the gift box is a backdoor, but a much smaller one than Roth conversions and backdoors (for those who otherwise don’t meet Roth contribution income limits).
At some point, when promised changes don’t come, the promise rings hollow. We’ve reached that point. But this newly “sanctioned” loophole is really a Grand Canyon -sized one. They don’t seem to care.
And/again no discussion on why no letter by the author to TD on proposing a regulatory change as well as no discussion on why yearly transfers over $10k to a recipient can be “properly” conducted with the same result! With all this chatter why not advocate…TD should privatize or stop the program and reduce their headcount…clear example of being careful what one wishes for! The “hostility” (“here, here, here and now here”) toward TD on the gift box is unbecoming…just my thoughts….what says you
I am a fan of TreasuryDirect, honestly, and have used it for 25 years in Legacy and Electronic forms. I am a frequent defender. No hostility. And if you don’t see this article as a public “letter” to TreasuryDirect urging sensible changes, I must be an awful writer.
In my view, the view of a regular reader of this site, because this article (and there, there, and there) within arguably the most prominent I Bond-related web publication despite its title focusing on TIPS, is advocacy and constitutes the open letter to TD that you suggest in point of fact.
In my opinion, there is nothing unbecoming about making suggestions on how to improve this program. There should be a higher annual purchase limit, the gift box should have clear rules codified in both writing and in practice, and we should demand greater responsiveness, clarity, and transparency from our government.
Wow…a regulatory requested action letter by media post…never heard of that. Bet TD hasn’t either. Who collects all of the post(s) and put them into the regulatory history file? Why have there been other direct mailings by the author to TD in the past? And the TD process for same is? Copy them and send to TD and bypass the middle person?
Yikes. “Hostility”? “Unbecoming”?! The First Amendment protects our right “to petition the Government for a redress of grievances”!
Here’s one way to let Uncle Sam know:
https://www.regulations.gov/deregulation
I submitted a suggestion to eliminate or increase the $10k limit in 31 CFR 363.52, although I doubt anyone actually monitors this “suggestion box.”
I hope they keep the giftbox option. For the last few years it has solved the problem of gifting my daughter 10,000 a year. She is very independent and handing over a check was always awkward and I could tell she disliked it. She didn’t need the money but I liked the idea of giving her the inheritance she would eventually get earlier. Having the money delivered via the giftbox was much easier and allowed her to use it as an emergency fund she could pretty much ignore.
I’m hoping they keep the giftbox and, perhaps, set an automatic delivery after 3 to 6 months to counter the problem of the gift initiator dying before gifting and all the problems that causes.
Your use here, gifts to a daughter, seems like a realistic use for the gift box, as it was intended.
I am unmarried and have been frustrated by the purchase cap for I bonds which is ridiculously low. I too haven’t opted for the gift box strategy because it would seem to invite problems. My solution has been to purchase EE bonds as well, which don’t seem to be great given the current interest rates on offer. I started buying EE’s in 2014 when I realized they double after 20 years. They did limit my losses in the bond market wipeout of 2022, as did I bonds.
And what to do now as retirement draws near? I find the TIPS ladder thing confusing and complicated. Perhaps lean into high grade municipals or a long term treasury fund with Vanguard? Hopefully 2022 won’t repeat anytime soon.
This is a great blog. I love all the free discussion and everyone is fairly civil. Have you thought David of who your successor might be?
Re: “Have you thought David of who your successor might be?”
Obviously I’m not David. But he has written of constructing a TIPS ladder with maturity dates to his 90s. I’m sure he won’t want all those lovely TIPS to “go to waste” by “outliving” him, so we should expect him to be around for a long time. 🙂
The Treasury needs to fund 35 trillion in debt, seems like any way possible of attracting investors to buy the debt should be examined. I believe the British still sell what are called Premium Bonds. They have lottery feature. Can buy these up to 50000 pounds. They have drawings every month and award prizes. Some lucky winner can get up to a million pounds tax free. The overall payout and cost run to about 3.6%. Since every one seems to be betting on just about everything these days, let’s turn these into lottery scratch offs. Instead of throwing the spent scratch offs in the trash, throw them in the junk drawer. Gather them up 5 to 10 years latter and at least get your initial money back.
I think your reference to “the [$30,000 annual] cap that existed from October 2002”, Should be to September/October 1998.
Also, do you have any comment on the March 1 elimination of the Zero % C of I for new accounts and the hint that the Zero % C of I is slated for elimination.
You are correct, and I have fixed the article. TreasuryDirect has some very odd info in its timeline, but obviously that $30,000 purchase cap existed in the 1999 to 2001 era of very high fixed rates. On the Zero % C of I, the change is another indication that TreasuryDirect is planning to change its purchasing systems. I wrote about that here: https://tipswatch.com/2025/10/26/treasurydirect-sends-another-clear-message-changes-are-coming/
What’s the fixed rate going to be after April 30?
My forecast is for a fixed rate of 0.9%, same as the current rate. We won’t know for sure until April 30. Read this: https://tipswatch.com/2026/04/12/i-bond-dilemma-buy-in-april-in-may-or-just-keep-waiting/
How ironic that the purchase limit on inflation-adjusted savings bonds is not itself ever adjusted for inflation.
Delicious, delicious irony.
I’ve only used the gift box for a younger non-spouse relative who has been redeeming the bonds to pay for higher education expenses. So I’ve been periodically delivering bonds when those bills come due. This approach I’m more comfortable with instead of doing a full one time delivery. It’s worked out well so far and would like to continue to have that option for the time being.
I’ve heard from other readers making this point: The gift box can be used to pass on money to a younger relative to redeem a bit at a time, possibly when they are in a low tax rate. I think this is in line with the way Treasury intended it to be used.
AmD…and I’m sure everyone is/should be aware that at the time gift box “gifts” are made they are deemed under gift tax law future interests when to nonspouses and require a gift tax return being filed (even if no tax is due) at that purchase time…that is what should be changed…too many Gotchas that have real impact!
Thank you for this article.
Please fix the error in the reminder: April 28, 2026 is a Tuesday.
Thanks for catching that. It is fixed.
To answer your question, I’ve already used the gift box to secure the fixed rate for this year. I’ve been retired and out of the workplace for 28 years and unable to contribute to my IRA. I look at the I-Bonds as a way to differ my savings from immediate taxes like my IRA that I can no longer contribute too.
Do you feel that doubling the purchase cap to $20,000, or possibly $30,000, would eliminate the need to use the gift box?
No. I have already moved more than that in several gift transactions as my CD’s have matured. But I do think the cap should be raised for the single people that are unable to use the spouse gift box. I bought $30,000 back in 2001 and recently started buying again.