Cashing EE bonds

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VictoriaF
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Cashing EE bonds

Post by VictoriaF » Sun Nov 10, 2019 10:18 am

In 2020, my paper EE savings bonds will start maturing. I was buying them starting in 1990, getting a $50 bond every month for over two years. Now these chicken are coming home to roost. What is the best way to cash them?
- Bring one EE bond to my bank every month?
- Bring several EE bonds at a time, thus foregoing some interest (4%) but saving time?

I am not even sure that my bank or credit union would cash them.

- How much hassle is it to convert paper EE bonds into electronic ones?

Thank you,
Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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HueyLD
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Re: Cashing EE bonds

Post by HueyLD » Sun Nov 10, 2019 10:23 am

Call or visit your CU or bank first and get as much info as possible.

If you have a bunch of small denomination bonds, you can cash them in batches to save time.

I would avoid converting them to electronic bonds if local financial institutions will cash them.

CZjc1330
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Re: Cashing EE bonds

Post by CZjc1330 » Sun Nov 10, 2019 10:31 am

First of all CONGRATULATIONS!! Smart move. :moneybag My CU will not cash them but most banks do. Don't forget to deduct taxes. If once a month isn't too much of a hassle, do that. Bank may set up an easy procedure for you. Nowadays, 4 % is a very good return. So hold on as long as you can! :beer

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VictoriaF
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Re: Cashing EE bonds

Post by VictoriaF » Sun Nov 10, 2019 10:44 am

Thank you, HueyLD and CZjc1330,

I will check with my bank and CU. Today, 4% is a good rate, but back in 1990 it was not so clear. I had just started a new job and was asked to canvas for the savings bonds. I agreed and, of course, signed for the bonds myself. Most people I was approaching were not interested, they had better investments in mind.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

Gill
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Re: Cashing EE bonds

Post by Gill » Sun Nov 10, 2019 10:46 am

CZjc1330 wrote:
Sun Nov 10, 2019 10:31 am
Don't forget to deduct taxes.
What does this mean?
Gill
Cost basis is redundant. One has a basis in an investment | One advises and gives advice | One should follow the principle of investing one's principal

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VictoriaF
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Re: Cashing EE bonds

Post by VictoriaF » Sun Nov 10, 2019 10:50 am

Gill wrote:
Sun Nov 10, 2019 10:46 am
CZjc1330 wrote:
Sun Nov 10, 2019 10:31 am
Don't forget to deduct taxes.
What does this mean?
Gill
My oldest bond is worth today $199.32, which is $149.32 gain from the time of its purchase (I paid $50). My assumption is that, if I cashed it today, a bank would give me $199.32 in cash and next year send me a 1099 form for $149.32 income.

Please correct me if I am wrong.

Victoria
WINNER of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)

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HueyLD
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Re: Cashing EE bonds

Post by HueyLD » Sun Nov 10, 2019 10:57 am

The interest portion will be shown in box 3 of form 1099-INT.

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tuningfork
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Re: Cashing EE bonds

Post by tuningfork » Sun Nov 10, 2019 10:57 am

IMHO converting them to electronic is most convenient. Send your paper bonds to Treasury Direct. When each bond matures it will be automatically redeemed and you can transfer the funds to your bank account. No need to go to a bank every month to redeem. You can specify tax withholding at TD, and they produce a 1099 each year.

arf30
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Re: Cashing EE bonds

Post by arf30 » Sun Nov 10, 2019 11:02 am

I just got a stack of EE bonds from my parents who were cleaning out their attic - most were close to or past maturity. You can tell this by entering the serial numbers on the treasury direct website. Your options are to take them to your local bank (I did this and had the money in my checking account by the end of the day), mail them in for redemption (takes 6-10 weeks and may or may not require medallion signature), or convert them to electronic (also requires mailing them in and waiting). You'll get a 1099-INT at the end of the year for any bonds cashed out.

HomeStretch
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Re: Cashing EE bonds

Post by HomeStretch » Sun Nov 10, 2019 11:08 am

VictoriaF wrote:
Sun Nov 10, 2019 10:18 am
How much hassle is it to convert paper EE bonds into electronic ones?
If you can’t find a bank/CU to cash your bonds or don’t want to make 24 bank trips, converting the bonds into electronic ones in a TD account is not hard but takes time (so convert early).

In my TD account, I created a “manifest” listing each bond (#, Date, amount, registration). I printed the manifest and, along with the original bonds, mailed them via USPS certified mail, return receipt request to TD (I kept a copy of package contents). After a couple weeks, my online account showed the bonds as received and conversion pending. IIRC, it took 8-10 weeks for the bonds to appear in my account. I can. I can see online the current market value of each bond and easily see when the bond gets the “interest bump” to face value after 17-20 years.

The online redemption process is easy. In my online account, I redeemed several bonds over the last two years and the funds appeared in my bank account within 1-2 business days. I logged into my TD account in January to print the Form 1099.

If you do convert these at TD, the only quirk is that the bonds appear in a conversion subaccount (of your main account) which requires a few extra clicks to view, redeem or find 1099. Online you can easily pull them into your main TD account. If any questions on how to do this, post back here as BH tibbits I believe it was posted how to do this and I used those instructions to easily consolidate my I Bonds and EE Bonds into same TD main account.

Mitchell777
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Re: Cashing EE bonds

Post by Mitchell777 » Sun Nov 10, 2019 11:42 am

I had the same concern a few years ago. Had many years of EE bonds that were just starting to mature each month. For me, it did not turn out to be the hassle I thought it would be cashing one each month at my bank. At first it seemed like the tellers were not very efficient cashing them but as they saw me each month they got quick at processing them.

dalbright
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Re: Cashing EE bonds

Post by dalbright » Sun Nov 10, 2019 11:59 am

I've cashed ee bonds last year and this year at Chase without problem. Be sure to keep an eye on the $$$ figures yourself just in case as they never sent me any tax forms other than a receipt at the time of service. I tabulated it all online prior to the visit to make sure the numbers were accurate. If not past maturity be sure to check the date of next accrual as waiting a few days/months can mean a big difference in how much you get!

donall
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Re: Cashing EE bonds

Post by donall » Sun Nov 10, 2019 12:00 pm

VictoriaF wrote:
Sun Nov 10, 2019 10:50 am
Gill wrote:
Sun Nov 10, 2019 10:46 am
CZjc1330 wrote:
Sun Nov 10, 2019 10:31 am
Don't forget to deduct taxes.
What does this mean?
Gill
My oldest bond is worth today $199.32, which is $149.32 gain from the time of its purchase (I paid $50). My assumption is that, if I cashed it today, a bank would give me $199.32 in cash and next year send me a 1099 form for $149.32 income.

Please correct me if I am wrong.

Victoria
You are correct! Bank will send 1099-Int. You can also have funds credited to a bank account for redeemed amount. Federal taxes paid while filing or estimated taxes paid during correct quarter.

Most bank employees are puzzled with paper savings bonds. But since it was quite popular as a baby present years ago, some millennials may be bringing in their baby gifts for redemption.

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