savings bonds

What Is Happening To $23.3 Billion Worth Of U.S. Savings Bonds

Posted on November 3, 2017

According to the U.S. government, 59 million paper savings bonds worth approximately $23.3 billion have reached final maturity and are no longer earning any interest.

Despite the availability of on-line bond calculators and bond management services, these figures continue to rise.

Approximately 50 million Americans own savings bonds. Most earn interest for 30 years from their issue date. Paper bonds continue to earn interest after they have reached their face value (initial maturity) until they reach final maturity, when they stop earning any interest.

Older paper bonds can be worth a lot more than their face value (depending on the series and issue date), which is usually a nice surprise when cashing in. However, the difference between the purchase price and the cash in value is considered report-able interest which can be a lot more than expected and must be reported on ones Federal Income Tax Return.

Furthermore, most are unaware of IRS interest reporting requirements. Even if a bond has not been cashed in, the total interest earned amounts should be reported on ones Federal Income Tax Return in the year the bond reaches its final maturity.

Since savings bonds are often purchased for retirement and/or education purposes, they are stored away and not properly monitored or managed. Unfortunately, many are forgotten about, or could be lost, stolen or destroyed.

Every bond owner should pull their bonds out of storage; check values, total interest earned amounts and maturity dates using a complimentary online savings bond calculator. If holding onto the bonds, a bond management service, such as Savingsbonds.com’s VIP Membership one that emails updated values, growth, performance, total interest earned amounts, and advance maturity alerts, should be considered.

Armed with this important financial information, investors can strategically plan to redeem bonds and understand any potential tax liabilities in advance. This will help investors avoid losing money and prevent any unexpected, unpleasant financial or taxation surprises.

Holding onto matured bonds no longer earning any interest is like giving Uncle Sam an interest free loan. It is good for the government, certainly bad for bond owners.

*3/17 U.S. Treasury Department statistics

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