Cashing in savings bonds...delays?

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jefmafnl
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Cashing in savings bonds...delays?

Post by jefmafnl » Sun Dec 01, 2019 5:46 am

We have US savings bonds, both physical (paper) and virtual (at Treasury Direct (TD)), which we probably will cash in next year for a down payment on a condo.

I seem to remember reading horror stories on this site a few years ago, about taking paper bonds to the bank, the bank sending them to the Treasury,
and months of waiting to actually receive the money (i.e., have it credited to a bank account). But this is NOT mentioned on the most recent threads about redemption.

So, based on recent (2018 or 2019) experience, how long does it take to actually have the funds credited:
--if you take paper bonds to your own bank?
--if you redeem virtual bonds at TD?

Thanks!

J

Artic777
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Re: Cashing in savings bonds...delays?

Post by Artic777 » Sun Dec 01, 2019 5:50 am

I've cashed in a few in the last few months and haven't had any issues. Local credit union deposits money in my account immediately, TD takes 2-3 days for the transfer.

Dandy
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Re: Cashing in savings bonds...delays?

Post by Dandy » Sun Dec 01, 2019 8:41 am

A few months ago I took some paper EE bonds to Bank America branch. Directed to the teller, showed I.D.,signed the bonds, money was put in our checking account "instantly". Took about 10 minutes. I was amazed -- especially that the money was available instantly. They also gave a printout of the bond detail showing the interest accumulated that will be taxable.

Treasury Direct redeems take a business day or 2.

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HueyLD
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Re: Cashing in savings bonds...delays?

Post by HueyLD » Sun Dec 01, 2019 8:49 am

All I can say is: YMMV. In my area, banks are very reluctant to cash paper bonds even for customers. They make it difficult by setting a low daily limit (such as $1,000 per day), refusing to cash bonds for noncustomers, etc.

So, before you open an account, ask those questions.

Cashing bonds at TD is a walk in the park.

HomeStretch
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Re: Cashing in savings bonds...delays?

Post by HomeStretch » Sun Dec 01, 2019 8:53 am

+1 on experiencing quick redemptions at bank and at Treasury Direct.

I think the “horror stories” are when posters can’t find a bank to cash the bonds or the bond registration isn’t accurate (typos, in the name of deceased relative, etc). The individual (not bank) has to then set up a TD account and mail in paper bonds to be converted to electronic holdings in the TD account. That can take awhile. Mine took 6 weeks but went smoothly albeit slowly.

As you already have a TD account with electronic bonds, consider sending in your paper bonds to be converted so they can be sold quickly if necessary next year.

AlmstRtrd
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Re: Cashing in savings bonds...delays?

Post by AlmstRtrd » Sun Dec 01, 2019 9:04 am

Dandy wrote:
Sun Dec 01, 2019 8:41 am
A few months ago I took some paper EE bonds to Bank America branch. Directed to the teller, showed I.D.,signed the bonds, money was put in our checking account "instantly". Took about 10 minutes. I was amazed -- especially that the money was available instantly. They also gave a printout of the bond detail showing the interest accumulated that will be taxable.

Treasury Direct redeems take a business day or 2.
I've been redeeming EE-Bonds off and on since 1998 and have had the same experience as Dandy at local banks in two different states. The slowest part of the process has been me signing the back of the bonds! I'll likely do this again this week as I have bonds from the early 1990s that are getting close to their maturity dates. I am trying to up my tax basis on some of my tax-deferred monies before starting SS and RMDs in another nine years (in a low tax bracket at the moment).

ALSO, when redeeming savings bonds, I have also always received a timely 1099-INT form from my bank.

Hope it goes smoothly for you, jefmafnl. Have read the responses and am a bit surprised that not everyone has had it so easy.

catlady
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Re: Cashing in savings bonds...delays?

Post by catlady » Sun Dec 01, 2019 9:44 am

We converted some paper bonds to virtual earlier this year using Treasury Direct. It took a few weeks after mailing for them to appear in our TD accounts. If you’re concerned about the turnaround time for the paper bonds, converting them to virtual before you need to redeem is an option.

tibbitts
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Re: Cashing in savings bonds...delays?

Post by tibbitts » Sun Dec 01, 2019 9:49 am

Ultimately you will have to convert paper to electronic (for ownership changes, for example) so probably just do it now and get it over with. I didn't like just sending off my bonds and waiting a couple of months, but now they're online so I can redeeem easily.

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nisiprius
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Re: Cashing in savings bonds...delays?

Post by nisiprius » Sun Dec 01, 2019 12:03 pm

I'm emptying out my electronic bond account because of my realization that the bonds in them are not co-owned and don't work the same way as co-owned paper bonds. The last time I did a redemption online, and, I believe the one before that, the proceeds appeared in my bank account overnight--and appeared as "available funds."

We know a local bank that redeems savings bonds, up to $1,000 for non-customers and unlimited for customers. Many banks, particularly the big "name brands," don't do that any more, and customarily fib by suggesting that nobody does. I don't know how hard it is to find banks that still do. It's been a while since I've redeemed a paper bond at a bank counter but the last time I did, I believe it was instantaneous (not even overnight).

Electronifying paper bonds is reputed to be slow. As I say, I am not going to do it, because one of the reasons we have paper bonds is that they are co-owned and can be redeemed by either co-owner (even without the other's permission), and I therefore believe them to be completely problem-free for the survivor if the other owners passes.

Redeeming a paper bond if there's no bank that will do it is troublesome, so if the bank stops providing this service and we can't find another that does, we will need to make some unpleasant choices.
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Watty
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Re: Cashing in savings bonds...delays?

Post by Watty » Sun Dec 01, 2019 12:41 pm

jefmafnl wrote:
Sun Dec 01, 2019 5:46 am
.....which we probably will cash in next year for a down payment on a condo.
It had been a while since I have done it but one thing to watch out for is that your lender will want to verify the source of your funds for your down payment. They may also ask for you to account for the source of those funds if the money has not been in the account for more than three(??) months.

One of the problems they are looking for is that some people will get a gift or private loan from someone like their parents and try to not tell the mortage company about that.

When you start shopping for the condo it is also a good idea to get pre-approved, not just pre-qualified, for a mortage and you will likely need to send in copies of your financial statements for that.

If you have paper bonds sitting in your safe it will be harder to document that.

It would be good to research how to handle that part of the timing.

AlmstRtrd
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Re: Cashing in savings bonds...delays?

Post by AlmstRtrd » Sun Dec 01, 2019 1:10 pm

Just wanted to add that I am hoping to redeem some paper bonds tomorrow and will try to remember to post again with my results. The last time I redeemed paper bonds was in 2019 and it was not an issue to have the funds immediately available at my bank where the redemptions were made.

AlmstRtrd
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Re: Cashing in savings bonds...delays?

Post by AlmstRtrd » Mon Dec 02, 2019 12:41 pm

Just wanted to post that is was no problem to redeem EE-Bonds at my local bank here in CT today. This is just a regional bank. Funds were available in my checking account immediately.

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