Treasury sets annual limit for savings bonds at $25,000

Savings bonds

The Treasury Department announced today that the annual purchase limit for savings bonds will be $25,000 in 2012.

Each individual will be allowed to invest as much as $10,000 in electronic Series I Bonds and another $10,000 in electronic Series EE bonds at

You can also buy a Series I paper bond of up to $5,000 using your tax refund by filing IRS Form 8888.

Savers had been wondering how much they would be allowed to invest after Treasury stopped selling paper savings bonds at banks and credit unions on Dec. 31.

Since 2008, we had been allowed to buy a maximum of $5,000 in each series in both paper and electronic bonds, and take advantage of the tax refund purchase.

The current interest rate on Series EE Bonds is 0.6% through April 30, 2012.

You'll have to hold the bond for at least 12 months. Cash it in before five years, and you'll be hit with a penalty of the three most recent months' interest.

Series I Bonds are yielding 3.06% through April 30, 2012.

That's far more than you can earn from even the highest-paying certificates of deposit. Click here to learn more about investing in Series I Bonds.

The minimum investment for both types is $25.

Purchase limits have been constantly adjusted since Series E bonds were first issued in 1941.

They've ranged from a low of $3,750 in 1941 to $30,000 between 2003 and 2007.

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