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Treasury Retail Securities



December 2007


Dear Savings Bond Representative:

Enclosed you will find a press release from the U.S. Treasury announcing that the annual purchase limit for
United States Savings Bonds will be set at $5,000 per social security number (SSN) for bonds with January
2008 and later issue dates. The limit applies separately to Series EE and Series I savings bonds and to bonds
issued in paper or electronic form in any calendar year. For additional information, please review the
enclosed press release and list of questions and answers.

Because of this change, the $10,000 paper Series I savings bond will no longer be offered for purchase. The
purchase order form for Series I bonds will be revised to reflect this change. In the meantime, your
customers may continue to use the current form to order Series I bonds of all other available denominations.
If you submit orders electronically, please continue to use your current software. We will notify you if any
purchase exceeds the new limit.

If you use Savings Bond Pro
®
to process sales, you might notice that it has not been updated to reflect the
new lower purchase limit. The new purchase limit is in effect and should be observed starting in January
2008. However, Savings Bond Pro
®
will not be updated to include the new limit until May 2008.

As you accept, review, process and submit savings bond purchase orders, please inform your customers of
the new limit. This will help ensure timely processing of your customers orders.

This information is also available online at http://frbservices.org/Treasury/SavingsBonds.html.

We appreciate your support of the U.S. Savings Bond Program.

Sincerely,



Barbara J. Pfeffer
Assistant Vice President
Treasury Retail Securities Site
Federal Reserve Bank of Minneapolis


Enclosures:
1.

Press Release
2.

Questions and Answers List










December 2007


Dear Savings Bond Representative:

Enclosed you will find a press release from the U.S. Treasury announcing that the annual purchase limit for
United States Savings Bonds will be set at $5,000 per social security number (SSN) for bonds with January
2008 and later issue dates. The limit applies separately to Series EE and Series I savings bonds and to bonds
issued in paper or electronic form in any calendar year. For additional information, please review the
enclosed press release and list of questions and answers.

Because of this change, the $10,000 paper Series I savings bond will no longer be offered for purchase. The
purchase order form for Series I bonds will be revised to reflect this change. In the meantime, your
customers may continue to use the current form to order Series I bonds of all other available denominations.
If you submit orders electronically, please continue to use your current software. We will notify you if any
purchase exceeds the new limit.

If you use Savings Bond Pro
®
to process sales, you might notice that it has not been updated to reflect the
new lower purchase limit. The new purchase limit is in effect and should be observed starting in January
2008. However, Savings Bond Pro
®
will not be updated to include the new limit until May 2008.

As you accept, review, process and submit savings bond purchase orders, please inform your customers of
the new limit. This will help ensure timely processing of your customers orders.

This information is also available online at http://frbservices.org/Treasury/SavingsBonds.html.

We appreciate your support of the U.S. Savings Bond Program.

Sincerely,



Amy J. Heinl
Vice President
Treasury Retail Securities Site
Federal Reserve Bank of Cleveland Pittsburgh Branch


Enclosures:
1.

Press Release
2.

Questions and Answers List






P U B L I C D E B T N E W S

Department of the Treasury Bureau of the Public Debt Washington, DC 20239



FOR IMMEDIATE RELEASE






December 3, 2007










ANNUAL PURCHASE LIMIT FOR SAVINGS BONDS SET AT $5,000

The annual limitation on purchases of United States Savings Bonds will be set at $5,000 per Social Security
Number, effective January 1, 2008. The limit applies separately to Series EE and Series I savings bonds, and
separately to bonds issued in paper or electronic form. Under the new rules, an individual can buy a maximum
of $5,000 worth of electronic and paper bonds of each series in a single calendar year, or a total of $20,000, in
single ownership form. If paper bonds are issued in co-ownership form, the limit applies to the first-named co-
owner. All limits are based on the issue price of the securities.

The reduction from the $30,000 annual limit in effect for both series since 2003 was made to refocus the savings
bond program on its original purpose of making these non-marketable Treasury securities available to
individuals with relatively small sums to invest. Approximately 98 percent of all annual purchases of savings
bonds by individuals are for $5,000 or less. The minimum purchase price for Series EE bonds is $25, whether
purchased electronically or in paper form; the I bond minimum purchase is $25 for bonds issued in electronic
form and $50 for those in paper form.

Savings bond purchases have been subject to an annual limit since Series E Bonds were first issued in 1941.
Over the years, limits have been adjusted by the Treasury Department several times and have ranged from a low
of $3,750 (at issue price) for Series E bonds from 1941 through 1947 to the $30,000 (issue price) limit that most
recently applied to both Series EE and Series I bonds. The limit was last set at $5,000 (issue price) in 1973.


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PA-768

www.treasurydirect.gov



Q & As Concerning the Change in the Annual Purchase Limit for Savings Bonds



Q.

What is the annual purchase limit for U.S. Savings Bonds?

A.

Effective January 1, 2008, the annual (calendar year) purchase limit applying to
Series EE and Series I savings bonds is $5,000, issue price, for each series. The
limit is applied per Social Security Number (SSN) or Taxpayer Identification
Number (TIN). Individuals or entities may purchase up to $5,000 worth of each
series in paper form. In addition, individuals can buy up to the same amount of
each series in TreasuryDirect online accounts, or a total of $20,000 (issue price)
in single ownership form per calendar year.

Q.

Why is there a purchase limit on savings bonds?

A.

The purpose of the savings bonds program is to provide individuals with a way to
save or invest relatively small amounts of money in non-marketable Treasury
securities. Individuals with saving or investment needs in excess of the savings
bond purchase limit who desire the safety and stability of Treasury securities may
purchase marketable Treasury securities (bills, notes, bonds and inflation-
protected TIPS), which are currently available through TreasuryDirect (and from
securities dealers and brokers) in $1,000 increments. Because there are
significant differences in the ways non-marketable and marketable securities earn
interest, are purchased and redeemed, etc., savers and investors should carefully
compare the terms of the securities, and their personal investment needs, prior to
purchase.

Q.

How does the limit apply to bonds held in co-ownership form?

A.

The limit applies to the SSN of the first-named registrant of a savings bond. This
registrant is considered the primary owner of the bond, whether it is issued in
paper or electronic form. The second-named registrant may purchase additional
securities, up to the annual limit, if that registrant is the primary owner of the
additional bonds.

Q.

Is the purchase limit cumulative?

A.

No. The limit applies only to bonds purchased in a single calendar year. There is
no limit on the total value of savings bonds that can be held by an individual or
entity.



Q.

Im buying bonds for myself and my children through my TreasuryDirect
account. How does the limit apply to these purchases?

A.

You can buy up to $5,000 each year of Series EE and I bonds in TreasuryDirect
on which you are the primary owner, plus up to the limit of each series in the
name of each child for whom youve established a linked account in the childs
name as primary owner. Minor linked accounts are sub-accounts of your own
master account, but do not provide you with ownership rights to securities held in
the linked sub-accounts. More information on linked accounts can be found at
www.treasurydirect.gov
.

Q.

Do bonds Ive bought as gifts through TreasuryDirect but have not yet
delivered to the gift recipient apply against my annual limit?

A.

No. Gift bonds are purchased in the name and SSN of the gift recipient. They do
not count against your annual limit even if you have purchased them through your
TreasuryDirect account but have not yet delivered them. Gift purchases in
TreasuryDirect count toward the ann