For the upcoming 2010 filing season, taxpayers will be able to convert their income tax refunds into Series I Savings Bonds – even without a bank account or an existing account with the Treasury. In future years, taxpayers will be able to purchase I Bonds for their children or grandchildren just as easily. The IRS has revised Form 8888, Direct Deposit of Refund to More Than One Account, with instructions for indicating this choice.

To use a refund to buy Series I Savings Bonds, the taxpayer puts the desired amount on Line 1a, 2a, or 3a. It must be a multiple of $50 and must not exceed $5,000. Then 043736881 is entered as the routing number on Line 1b, 2b, or 3b and the “Savings” box on Line 1c, 2c, or 3c is checked. Finally, “BONDS” is entered as the account number on Line 1d, 2d, or 3d.

The IRS has created a web page with questions and answers on this option.