savings bonds Archives - Ramblin' with Roger

Cashing in the savings bonds

paying for higher education

I wanted to start cashing in the savings bonds I bought thirty years ago. Late in 1992, I decided to buy $100 US savings bonds through my job’s payroll plan; they cost $50 each.

The first two EE bonds matured recently. The elder, from 1992, was now worth a whopping $207.36. However, the second, from 1993, was valued at $164.12. It’s like me to get on a good thing after it peaked.

I checked my bank’s website, which suggested they would cash them, but I went there and was told, “We haven’t done that in years.” Then I checked my credit union’s online bot, which told me I had to prove they were mine, even though my name was on them. I would need an unsigned copy of FS Form 1522.

After posting my confusion on Facebook, I got advice to try my credit union, my bank but to give them notice, and another bank. Ultimately, I went to my credit union, which was easier than anticipated.

I noticed that my bonds from 1993 through 1995 are getting 4% interest, which will cash out at about $160 each at maturity. But the 1996 and 1997 ones now receive 2.82% interest and will only be worth about $125 eventually.

Taxes

One of my relatives has several matured savings bonds left by a spouse, which they have not yet cashed because they are wary of the tax implications.

From Smart Asset: “You won’t pay state or local income tax on interest earnings, but you may pay state or inheritance taxes if those apply where you live.

“You have one option for avoiding taxes on savings bonds: the education exclusion. You can skip paying taxes on interest earned with Series EE and Series I savings bonds if you’re using the money to pay for qualified higher education costs. That includes expenses you pay for yourself, your spouse, or a qualified dependent. Only certain qualified higher education costs are covered, including:

Tuition
Fees
Some books
Equipment, such as a computer

“You can still use savings bonds to pay for other education expenses, such as room and board or activity fees, but you wouldn’t be able to avoid paying taxes on interest.”

Estates

I’ve known a couple of people dealing with estates involving savings bonds. They involve more legalese than I need to share here.

They may need to provide death certificates they do not possess. I know that, e.g., the city of Albany provides them “upon proof of entitlement under New York State (NYS) Public Health Law.” In Mecklenburg County (Charlotte), NC, you can get one when “seeking information for legal determination of personal property rights.”

Oh, I know I have lost one bond from 1993. I can tell because there is a gap in the dates issued. Since I have a TreasuryDirect account, I can replace it by filling out FS Form 1048. It shouldn’t be signed before being witnessed by a notary.

Tracking the U.S. savings bonds

older series of savings bonds cannot be redeemed directly at the bank

Savings Bond

The family was looking to calculate the value of some United States Savings Bonds we’ve unearthed. I have about 30 of them, $100 Series EE, from the mid-1990s. I went to the TreasuryDirect site, Calculate the Value of Your Paper Savings Bond(s). The earliest one is gaining interest at a robust 4%, the last one at a paltry 1.08%.

When I leafed through them recently, I noticed that I was missing one! I could tell because I was buying them every eight weeks but there was a gap in the summer of 1995. Fortunately, I can send info to the Treasury Department and get an electronic replacement. Savings bonds these days are only issued in an electronic version of either bond, also trackable at TreasuryDirect.

Here’s a useful feature on the website. You can create a list of your paper bonds. BUT “if you’re using Google Chrome or Microsoft Edge as your browser, the Calculator won’t save your inventory.” Nope. You can use Internet Explorer, Mozilla Firefox, Netscape Navigator or Communicator, MSN Explorer, Opera, or Safari. Now I have used IE and Netscape. To my surprise, I DO have Firefox on my current computer, though I don’t recall actually using it.

As a librarian, I had often discovered that there are some obscure state and federal websites that simply don’t use certain popular browsers. Some note this right on-site — and some DON’T. About a decade ago, I realized that if I wanted to download a file from a certain Census page, IE was the only way to go.

Series EE, Series I…

This FORBES article explains the different types of U.S. Savings Bonds. Bankrate notes that “in general, holding any savings bond beyond 30 years is essentially pointless as this is when bonds stop earning interest. So if this is your situation, it’s time to cash in that bond.

Forbes: “If you have a paper savings bond, you can often redeem this bond at a local bank or credit union. According to the Treasury Department, more than 95% of savings bonds are cashed at local banks and credit unions.

“But some older series of savings bonds cannot be redeemed directly at the bank or credit union. In that case, you will need to fill out a special form FS Form 1522, and send the bond to the Treasury Department’s Treasury Retail Security Services team with a certified signature and direct deposit instructions.

“Even if your bank or credit union cannot cash an older bond for you, or if you have special circumstances like needing to redeem a bond that was inherited as part of a deceased person’s estate, the bank will typically be able to help you understand the process for redeeming the bond and can certify your signature on the Treasury form. So, when in doubt, start by going to the bank.”

Its name is Bond: Savings Bond

The $25.00 outlay has gained $6.96 in interest, currently at 0.63%, and is now worth a whopping $31.96.

Our family – mostly I – is cleaning out our attic, and that fact MAY become the source of several blog posts. I have noted that it has become a bit of a sore point. We all have stuff up there, but I have items that are relegated there because there’s no room on floors one and two, according to the powers that be. So I have two bookcases, with books, that I would be inclined to access, e.g.

When we decided to get the attic insulated, it took THREE years. Moving all the stuff to half of the attic, then have it insulated. Then paint it, which I would have skipped. And for a brief time – maybe six weeks, the attic was again a usable space. But then time to insulate the other half, so everything’s then in the OTHER half of the room. And this took the contractor FOREVER to do, until I got…rather grumpy about it, let’s say. Room gets insulated; floor, which was weakened, was repaired; room (again, I believe unnecessarily), was painted.

NOW, finally I could put things from one side of the attic into the other, rather than have everything packed to the ceiling on one side, where I can’t access/find anything. Some of the clutter are old bills and the like, which I WOULD have gotten to a couple years ago, if that had been possible.

One box, I quickly determine was receipts of The Wife’s, all from 2004, the year the Daughter was born. One thing I DID take out was a $50 savings bond. Hmm, I wonder what it’s worth. I go to the TreasuryDirect calculator, and discover that a $50 savings bond purchased in April 2004 doesn’t mature until April 2034. The $25.00 outlay has gained $6.96 in interest, currently at 0.63%, and is now worth a whopping $31.96.

I then remember that I have a about two dozen $100 savings bonds, purchased for $50 each, from the mid-1990s, and I should check their value.

The first one, purchased 01/1993, has gained $89.56 in interest, is still gaining at 4.00%, and is now worth $139.56, more than face value. Cool.

The first ones I got in the next two years are worth somewhat less: the one I purchased 02/1994 has $57.56 in interest, still at 4.00%, for $107.56. 01/1995 has $53.72 in interest, at 4.00%, for $103.72.

But then it drops off badly. My 01/1996 purchase $50.00 has made $50.00 in interest, but is getting only 0.59% interest now. And the last one I bought, in 08/1997 has garnered only $36.20 in interest, and is receiving only 0.63%.

So if I were to have to cash them in, I’d start with the 1996 issue, then 1997, 1995, 1994, and keep those 1993 bonds for last. Savings bonds don’t seem to be the golden value they used to be.