All Savers Certificate


DEFINITION of 'All Savers Certificate'

A type of nontaxable certificate of deposit account with a duration of one year that was used primarily by thrift institutions to build funds for mortgage lending. All Savers Certificates were authorized by the Economic Recovery Tax Act of 1981.

BREAKING DOWN 'All Savers Certificate'

The Economic Recovery Tax Act of 1981 (ERTA, or the Kemp-Roth Tax Cut) reduced individual income tax rates, accelerated expensing of depreciable property and created incentives for small businesses and savings. Under terms of the Act, All Savers Certificates were issued only between October 1, 1981, and December 31, 1982. The minimum deposit was $500 and provided a fixed rate tied to Treasury bills. Holders received a one-time exemption from federal income tax of up to $1,000 on earned interest ($2,000 on a joint return).

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