Purchase Limits
Are you confused about how much you're allowed to purchase in savings bonds or marketable securities each year? It's simple!
Savings Bonds
Here’s how the purchase limits work:
Through your TreasuryDirect account - which is established using your name and social security number, bank information, driver’s license and e–mail address – you can invest in electronic savings bonds (also referred to as book–entry savings bonds) each calendar year by purchasing as much as:
- $5,000 in Series EE Bonds, and
- $5,000 in I Series Bonds.
You may also invest the same amount in paper savings bonds -- using your name and social security number -- by purchasing as much as:
- $5,000 in Series EE Bonds (which is equivalent to $10,000 face amount), and
- $5,000 in I Series Bonds.
Remember: Electronic Series EE Savings Bonds are purchased at par. So when you invest $100, you are issued a security in your TreasuryDirect account for $100. On the contrary, if you invest $100 in a paper Series EE Savings Bond, you are issued a bond showing $200 on the face of the paper certificate. Each of the bonds, if issued on the same day, earns the same rate of interest and will have equal values on any given date.
Exceptions: Paper savings bonds purchased as gifts aren't included in your annual limit. Also, the purchase amount of electronic savings bonds you transfer, deliver as gifts, or de-link to another TreasuryDirect account holder is applied to the receiver's annual purchase limit in the year the transaction occurs, and not to your own limit.
Marketable Securities -- Bills, Notes, Bonds, and TIPS
The most important thing to remember about purchasing marketable bills, notes, bonds, or TIPS is that the limits are set for each auction, not by year. The limit for noncompetitive purchases is $5 million for each security type and term, for each auction. This limit applies regardless of whether you're buying a bill, note, bond, or TIPS, and regardless of what method you use to make the purchase (TreasuryDirect, Legacy Treasury Direct, broker, or dealer).
In other words, you could invest as much as $5 million in each security listed below -- in every auction offering -- without violating the purchase limit. For example, you can purchase:
- $5 million each in 4-, 13-, 26-, and 52-week Treasury Bills,
- $5 million each in 2-, 3-, 5-, and 10-year Treasury Notes,
- $5 million in 30-year Treasury Bonds, and
- $5 million each in 5-, 10-, and 20-year Treasury TIPS.
Besides the maximum noncompetitive bid limit, we also have a household limit. This limit applies to a person, spouse and children under the age of 21 having a common address. These individuals within a household need to total their bids to make sure that their bids do not exceed the noncompetitive bid limits for each auction as stated above.
For example, in a Treasury bill auction, a husband, wife, an 18 year-old living at home and a 21 year-old living at home each placed a bid in the auction. The husband, wife and 18 year-old would not be allowed in total to bid over the maximum limit of $5 million. But, the 21 year-old living at home would be allowed to bid separately up to the maximum bid of $5 million.
Reinvestments in TreasuryDirect and Legacy Treasury Direct don't count toward the purchase limit. Unlike Legacy Treasury Direct, TreasuryDirect doesn't provide an option for automatic reinvestments. You may reinvest a matured security held in TreasuryDirect by directing that the redemption proceeds of the security be used to purchase a certificate of indebtedness (C of I), and then using the redemption proceeds in the C of I to purchase a new marketable Treasury security. The purchase limit does not apply in TreasuryDirect when a security is purchased in this way.
Zero-Percent Certificate of Indebtedness (Zero-Percent C of I, or C of I)
A Zero-Percent C of I is a security that can be funded in your TreasuryDirect account and used to purchase other securities. It's issued daily with a one-day maturity that automatically rolls over at maturity - and continues to do so until the customer requests redemption. It does not earn interest. The purpose of a C of I is to accumulate funds for the purchase of another eligible security in the TreasuryDirect system.
A C of I may be funded in several ways:
- Payroll deduction,
- Depositing proceeds from your securities (interest, redemption, maturing proceeds), and
- Withdrawing funds from a designated bank account.
There is no limit to the amount that may be held in your C of I. However, only $1,000 may be withdrawn from a designated bank account for each transaction.
By remembering these simple rules, you should avoid exceeding any and all purchase limits.
