I recently rediscovered a hefty stack of that cream-colored currency that I’ve been hoarding for years, and I wasn’t quite sure what to do with the bonds. What are they worth? Should I cash them? How would I even go about cashing them?
If you have any U.S. savings bonds of your own, here are a couple of things you can do with them.
Find Any Missing Bonds
Even if you have nice stack of bonds burning a hole in your pocket, you may have some bonds that you or a family member lost along the way. The U.S. Treasury Department has a website called TreasuryDirect whose Treasury Hunt tool tracks down certain bonds that haven’t been cashed. They must have been issued after 1974 and must have reached final maturity in order to be found. All you have to do is enter your Social Security number, and Treasury Hunt will do the rest.
Find Out How Much They’re Worth
That number on your Series EE bond can be deceiving – it doesn’t necessarily reflect how much you would get if you cashed it. Your bond could be worth less or even more than the denominational number that’s shown. Series EE bonds are purchased at half the face value listed on the bond, and over time they earn interest. When they reach their maturity date, they’ll be worth that listed face value. Interest rates and maturity dates depend on when they were originally purchased. The U.S. Treasury Department has another tool to calculate the value of your savings bonds.
Convert Them to Digital
Now that you know how much they’re worth, you may want to convert your bonds to digital assets using TreasuryDirect’s Smart Exchange. This program allows you to convert your paper savings bonds into electronic bonds. You can finally throw that old shoebox away and rest easy knowing you won’t lose them the next time you move. Another perk of using Smart Exchange is that once they’re converted to digital, you can cash them at any time into the bank account of your choice.
Transfer Them to Someone Else
Perhaps you’re feeling generous and would like to transfer ownership of your Series EE savings bonds to someone else. It would be a nice gift for a recently born niece or nephew – or maybe you want to finally pay back that coworker you always borrow money from. Whomever you have in mind, you can make the transfer to them through the aforementioned Smart Exchange.
To cash, or not to cash – that is the question. Whether it’s more profitable to remain as a bond or to cash and suffer the slings of the federal income tax, Paul Jacobs of Palisades Hudson Financial Group advises, “U.S. savings bonds are about as safe an investment as you can get,” and that “your savings bonds will grow in value until they mature or you cash them in.” According to the certified financial planner, there are three main reasons you’d consider cashing in bonds before they mature – paying for education (which avoids being taxed), investing in securities with higher expected returns, or if you have a year in which you happen to fall in a lower tax bracket than usual.
Since some of my bonds haven’t reached full maturity, I decided to hang onto them. I converted them to digital so I don’t have to worry about losing them, and I can easily check to see when they do reach their maturity date.
If you have any additional savings bonds tips, feel free to invest in the comment section below.
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