Gyroscopic Investing

Sophie,

Didn't you write something once about finding an old savings bond and choosing not to redeem it? I think the taxes were high and it would make more sense as a keepsake than anything else. I could search harder for the thread, but it's easier to just ask you to retell it. 

I have a bunch of old savings bonds to deal with. That's why I'm asking. The were bought when I was a kid.

Dualstow,

This is I Am Not Sophie. I don't know how old you are but E bonds bought November 1965 or earlier continued to earn interest for 40 years, not 30. I came upon one of these treasures a number of years back and got about 35 years of interest.

I am the same age as Medium Tex.  I think.

Well, I plugged in some bond dates and serial numbers at treasury direct this morning and saw that 3 bonds have matured. They have the official 'MA' mark at the website.  (They probably ignore the serial numbers but let you record them for yourself). I have newer bonds that I bought on my own before I had a retirement account but these oldies have just recently been handed over to me. 1983!

And the drawback to taking them to the bank and getting some greenbacks is what? Sorry, this is still I Am Not Sophie posting

barrett wrote: And the drawback to taking them to the bank and getting some greenbacks is what? Sorry, this is still I Am Not Sophie posting

Can you just do that? I found a 50$ savings bond among my wife's things when she died but I figured it would be more of a hassle to try to get the 50 bucks than it was worth. If I can just hand it to them and they'll fork over the money I'll ride down to the end of the block on my bike and then take my wife to dinner.

You can if it's a EE bond, Fred. I think I-Bonds still have to be sent in.
Deposited $800+ today from 3 pieces of paper with paltry face values. I'm going to miss JFK smiling back at me, so I'm glad I took a photo before I turned'em in.

Fred wrote:

barrett wrote: And the drawback to taking them to the bank and getting some greenbacks is what? Sorry, this is still I Am Not Sophie posting

Can you just do that? I found a 50$ savings bond among my wife's things when she died but I figured it would be more of a hassle to try to get the 50 bucks than it was worth. If I can just hand it to them and they'll fork over the money I'll ride down to the end of the block on my bike and then take my wife to dinner.

Unless the rules have changed recently, you can just take an I-Bond to the bank as well. Fred, I am assuming your name was on the bond as either a co-owner or POD beneficiary? If so, it should be a piece of cake. In my experience redeeming savings bonds only takes a bunch of time if you are slow at signing your name or the bank teller is not snappy.

They'll even give you a printout that shows your gain on the bond & they'll send you the tax form (1099-INT) to file at the end of the year.

barrett wrote: Unless the rules have changed recently, you can just take a I-Bond to the bank as well.

Could be. It may just be my bank that chooses to send them in. I didn't pursue it, because I only brought in these matured double E's. (almost sounds dirty, but not quite).

Sophie will get around to the original question in this thread, but I also have a side question:

It looks like both I-bonds and EE bonds are purchased at face value. Didn't there used to be a bond that you purchased at half of face value? Maybe I'm thinking of Patriot Bonds.

EDIT: I guess it was all paper EE bonds.

Paper EE bonds, last sold in 2011, were sold at half of face value.

- treasury direct

Yeah, I have a bunch of those old EE bonds and the fact that they used to be purchased at half of their face value was really confusing.

Here is my side note: I got to thinking yesterday when both Dualstow and Fred were asking about cashing in old bonds that on balance the US government probably makes out really well on savings bonds. If people who obviously care about their finances are finding bonds and considering not redeeming them, think about all the savings bonds that are sitting unredeemed in filing cabinets, shoe boxes, attics or whatever. My dad used to just throw his in a drawer with a bunch of other papers. Kids used to get them at birth from relatives and it's not hard to imagine that a lot of them got lost or even discarded without a record of serial numbers. The one I had (I think as a birth present from my uncle) just kind of miraculously appeared in a pile of crap when I was 35 or so.

And, if I am correct, why would the government do away with such a wonderful program? Make the masses keep track of their pieces of paper.

barrett wrote: And, if I am correct, why would the government do away with such a wonderful program? Make the masses keep track of their pieces of paper.

It's b/c they're so magnanimous. 

Reminds me of giftcards before regulation stepped in to protect consumers from expiration and monthly fees, although that was downright nefarious. Paper bonds? Yep, the onus is on us to care for them.

Hi dualstow!  Sorry for the delay - too busy for words right now.  It's a rare moment of pleasure to log in and check the forum...

You remembered correctly!  It was a $25 savings bond (EE-like) given to my brother when he got his Eagle Scout badge.  The interest rate made us all slobber in envy at the Good Old Days when savings accounts got 5% interest.  But, the penalties on the unpaid taxes (technically due about 10 years ago when the bond matured) would probably have been more than the value of the bond itself.  So, we all agreed no point even mentioning it to the bank.

My mother was so upset the other day when she heard that you can no longer buy paper bonds as gifts.  It's like the passing of an era.

Of course! Unpaid tax penalty! Ah, I forgot about that. Probably just a few years on mine, so it shouldn't be too much of a hit.
Thanks for the reply, and I'll let you get back to your busy-ness, as long as you promise to stop in the forum once in a while!

If we go to negative interest rates, if you buy some I-bonds prior to that event, at least you'll get 0%

Yes I mentioned that before - savings bonds are a great way to get around negative interest rates.

Dualstow, I posted this just for you :-) and will do my best to keep up despite the crazy schedule the next month or so.  And go cash that bond and congrats!

sophie wrote: And go cash that bond and congrats!

Oh, I did. See reply#5. Fun!

And Sophie, I spoke to someone today who wasn't positive but who suggested that there wouldn't be any tax penalty on yours. That's what I would think, too. I know there's phantom interest on things like Zeroes, but I would think that with regard to your brother's savings bond, the clock starts when he redeems and not before. Anyway, maybe check it out further.

Cheers!