ear. For additional information, please review the enclosed press release and list of questions
and answers. Please share this information with your employees who purchase savings bonds
through payroll deduction.

Applicable forms will be revised to reflect this change. In the meantime, please continue to use
the current forms. If you submit orders electronically, you may also continue to use your current
software.

For additional information about the change in the annual savings bond purchase limit, please
visit www.treasurydirect.gov.

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


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 annual limit of the recipient in the year they are
delivered.

Q.

Im having more than $5,000 a year taken out of my pay to purchase savings
bonds. How will this change affect my payroll savings deductions?

A.

You will need to adjust your payroll deductions downward to a level that does not
exceed $5,000 per series in a single calendar year.

Q.

Can I still purchase a $10,000 Series EE bond?

A.

Yes. Because paper Series EE bonds are bought at half of face value, the $10,000
denomination (cost price, $5,000) can still be purchased. However, because of
the change in limit, the $10,000 denomination paper Series I bond is no longer
available for purchase after December 31, 2007.

Q.

Does the change in annual limit restrict my ability to convert my paper
bonds to TreasuryDirect?

A.

No. There is no limit on how many previously-issued paper bonds can be
converted to electronic securities in your TreasuryDirect account in a single year.





Q.

Where can I purchase savings bonds?

A.

Series EE and Series I savings bonds can be purchased in paper form through
most financial institutions and through employers offering a payroll savings plan.
Bonds can also be purchased directly from the Treasury Department by opening a
TreasuryDirect account. For more information on savings bonds and how to open
a TreasuryDirect account, please visit our website,
www.treasurydirect.gov
.

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