Use Your Tax Refund to Fight Inflation

Q: What is the current yield?

A: The total return if you buy now is 3.36 percent. The fixed-rate component is 0.3 percent above inflation for any bond purchased in the current (until April 30) six-month period. That's what you will earn for that component as long as you hold the bond, even if inflation shoots higher.

The yield will next be adjusted on May 1.

Q: How do you convert your refund into I-bonds?

A: If you prepare your own return, file Form 8888 ("Direct Deposit of Refund to More Than One Account"). Instead of listing an account number for direct deposit, enter "bonds."

The bonds must be bought in multiples of $50, up to a maximum of $5,000, with the remainder going into your bank account as in the past. If the refund happens to be an exact multiple of $50, simply enter the request for bond purchases on the tax return and skip the special form.

The I-bonds will be mailed to you.

If you don't do your own return, just tell your tax preparer you want to buy savings bonds with your refund.

You also can buy them directly at the Treasury Web site. This has the advantage of letting you buy more — up to $5,000 electronically per calendar year per person in addition to $5,000 in paper bonds — and in more denominations.