A fact sheet distributed with President Obama's weekly radio address for September 5, 2009 (Labor Day weekend) says that beginning next year there will be an option to invest tax refunds in Savings Bonds.

This was originally suggested by Harvard Business School's Professor Peter Tufano and has been tested by the IRS and the tax-return preparation company H&R Block.

There's no word yet on whether both Series I and Series EE bonds will be eligible, or on whether the annual Savings Bonds investment limit will be raised from its current miserly level. [Later: see the comments below for more info.]

From the fact sheet:

Create Easier Ways to Save Tax Refunds: More than 100 million families receive federal income tax refunds each year. Averaging more than $2,000, tax refunds present a unique opportunity for families to save. Taxpayers can already instruct the IRS to directly deposit their refunds and dedicate a portion to an IRA or other savings vehicle. Today, the Treasury and IRS announced that taxpayers will have another savings option beginning in early 2010 the ability to use their refunds to purchase U.S. savings bonds simply by checking a box on their tax return, without having to open an account at Treasury or take any other action, and even if the taxpayer doesn't have a bank account. The savings bonds would be mailed to the taxpayer. Taxpayers will be able to purchase bonds in their own names beginning in 2010 and to add co-owners such as children or grandchildren beginning in 2011.
How many idiots will fall for this? It's always a great investment to loan your money to the gov't, interest free, for up to a year and then let them keep it for a bunch more years and repay you .1% in dead dollars later.