Are your old Series EE bonds no longer earning interest?

[lucky penny]

A friend who knows how conservatively I invest just reminded me that Series EE bonds no longer earn interest after 30 years. And no one reminds you of this when it happens; it's up to you to cash out.

I checked my bonds with trepidation, but my oldest ones (I don't have many) are from 1992-93 & are still paying 4% - so I'm OK. I'll have a boatload of interest to pay taxes on when these are done - any way to avoid that?

These bonds were very popular when issued in the late 1980's because they were paying 7.5% for a while.

I'm not sure how to post a link, but here's an article on the subject:

https://www.freep.com/story/money/p.../16/cashing-savings-bonds-1986-glut/76916276/

 

[samclem]

You can avoid taxes by using the proceeds from selling them to pay higher education expenses for yourself or a dependent. More here:



In part:

• Tuition and fees (such as lab fees and other required course expenses)
• Expenses that benefit you, your spouse, or dependent for whome you claim an exemption.
• Expenses paid for any course required as part of a degree or certificate-granting program.
• Expenses paid for sports, games, or hobbies qualify only if part of a degree or certificate program.

That third bullet can be fairly broad. Enroll in a local community college and see what kinds of classes/labs/trips you could buy with the money. I don't think you have to actually pass the course, etc.

 

[Just_Steve]

My DW had one EE bond come due for the last year and one coming due every month for the next two years, pays for a nice family dinner out or 2-3 if its just me and DW. They were all bought by payroll deductions by DW and a company match back in the 80's.

 

[HGTVfan]

I have one EE bond coming due in 2019 and most of the rest in 2022 and 2023. I purchased these while working but I still remember buying them as a child at school. I can’t recall the details - something about stamps I think - but it was a nice way to teach kids about savings.

 

[mystang52]

You can convert your paper bonds to electronic. Then, you can check status of your bonds online. You still won't get any overt notification of an expired Bond, but: on the home page is a category "Zero Percent C of I." The proceeds of any Bond that has matured will be placed here, so it is readily seen. You can then transfer the amount to your bank, or even purchase a new Bond if you're so inclined.
Like I said, no overt notice but it is readily apparent.


As an aside, I practically begged my employees to sign up for automatic purchases of US Bonds. My batting average for success was, literally, .000.


The "sales pitch" I made was how painless it can be. I even told them how much I had, always mentioning that the accumulation was easy. All to no avail.

 

[Hermit]

I cashed all mine the last year I planned to pay for DS's college. I lost a few years of interest on some, but saved a bunch on taxes on the whole lot. It really wasn't worth worrying about squeezing the the last penny out of them.

I had to go to several banks to find one that would take them all. Wells Fargo did.

 

[Doribe]

A friend who knows how conservatively I invest just reminded me that Series EE bonds no longer earn interest after 30 years. And no one reminds you of this when it happens; it's up to you to cash out.

I checked my bonds with trepidation, but my oldest ones (I don't have many) are from 1992-93 & are still paying 4% - so I'm OK. I'll have a boatload of interest to pay taxes on when these are done - any way to avoid that?

These bonds were very popular when issued in the late 1980's because they were paying 7.5% for a while.

I'm not sure how to post a link, but here's an article on the subject:

https://www.freep.com/story/money/p.../16/cashing-savings-bonds-1986-glut/76916276/

I cashed mine out since last kid is finishing up college.

 

[zinger1457]

If you deferred paying taxes on the interest earned on the savings bond the tax is due the year it matures and you will get a 1099INT. The Gov won't miss their opportunity to collect the tax owed.

 

[ncbill]

Thanks for this thread...now I have to go see of there are any left in our safe-deposit box I can cash out tax-free to pay for tuition this fall.

 

[beowulf]

Check your HH bonds, if you have any. My mother had a pile of E bonds going back to WWII that were about to mature and she converted them to HHs. She was able to do that without paying any taxes. The HHs then payed interest every 6 months directly to the owner. They mature after 20 years with no extension possible. She put my name on them as co-owner and I became sole owner when she passed. Eventually they all matured and I had to pay taxes on all the interest that was part of the HHs value. I'm glad I finally was able to get rid of them over several years. I only have I bonds at this point.

 

[Dtail]

Keeping a yearly schedule for my son's EE Bonds. 2 years to go for the oldest ones.

 

[GrayHare]

If you deferred paying taxes on the interest earned on the savings bond the tax is due the year it matures and you will get a 1099INT.

No 1099 for the bonds will be issued if you have not registered them online and do not redeem them.

 

[MooreBonds]

The IRS does allow you to declare the interest earned each year - but the catch is that you must do that on all bonds you own. So the first year you decide to use this method, you would declare all interest accumulated from 1992-2018, then in fiscal 2019, you'd declare the interest earned by the bond in 2019, etc. When the bond matures, your financial institution will still give you a 1099 showing the full interest earned and paid at maturity - but it's up to you to put on Schedule B "negative" entries for the prior years you declared interest, and include copies of prior years' Schedule B.

Sounds like you'd have a large nut of interest to declare now - so unless you think you will have lower income now than in 2022/2023, perahps just cash in a few each year before maturity if it help;s you stay in a lower income bracket.

 

[Helena]

.

I have EE bonds [most of them bought via my employer] with dates spaced out from 1991 to 2008.

My 2007/2008 EE bonds earn a fixed rate of 3%.

.

 

[joeea]

You can convert your paper bonds to electronic. Then, you can check status of your bonds online.

No need to convert your paper.

Just go here: https://www.treasurydirect.gov/BC/SBCPrice

 

[Andre1969]

My Mom used to take out savings bonds, for me starting in the early 70's, and they used to be common Christmas, Birthday, etc gifts. Sometime in the mid 1990's, she gave me a bunch of them to hold onto...this particular batch had been purchased sometime between roughly 1978 and 1994.

At one point, while I was married and going through financial problems, I did cash a few, but then decided no more, and saved the rest. And then, forgot about them, figuring the 30 years final maturity is years away.

Well, in 2003 my Mom sprung a surprise on me...the other batch, that she had started in the early 70's, she had forgotten about. They got packed away somewhere, but then she found them, and gave them to me. I forget how much the total was at the time, maybe $15K or so? And the other batch, that she had given me in the 90's, was worth maybe another $5K.

Anyway, by 2003 a bunch had reached final maturity, and were no longer paying interest, so I cashed them in all at once.

Since then, every few months I would go to the bank and deposit a few at a time, as they hit the 30 year final maturity mark. Lately, that's been less often, as Mom had cut back on buying them in the mid/late 80's. I think the total between the two batches she gave me is down to around $4-5K now.

It's weird to think, now, that the final bond will hit final maturity in 6 years (June 2024). Back in 1994, when I got it, 30 years seemed like such a long time.

 

[cranberryjoe]

I bought savings bonds through my employer payroll deduction over a number of years. I converted all my paper bonds to electronic at Treasury Direct and have it setup to automatically redeem when they stop earning interest. My oldest EE bond turns 30 in August, so I will know then if the automatic redemption works. If so, I'll be receiving regular "paychecks" again for a number of years.

 

[brucethebroker]

Thanks for the heads up!

Have not checked on them for 7 years! Only have two, from 1994 (2.44% int).

Used to travel for business, and a national chain hotel (forgot which one), gave a free $25 for each night stayed during one summer. Heck of a deal!

 

[bingybear]

one of mine matured and was cashed out several years back (wedding present) The rest are still paying. They are set to auto redeem on maturity. Still plenty of years as the oldest is similar to the OP

 

[JoeWras]

Found a few hidden ones a few years ago that were past due. Darn! It irked me because I converted all my other ones to on-line in treasury direct.

Speaking of which... I was on Megacorp's auto purchase plans for a while in the early 90's (obviously I didn't work for mustang). These are now coming due and it will happen automatically. I'll just pluck the proceeds out of ZPCI.

 

[LARS]

I am anxiously waiting for my EE's to reach 20 years when the Treasury will recompute interest to 4% (i.e. doubling original value of bonds). Going to be a nice windfall when it occurs!!!

 

[Rustic23]

Don't have a clue if it is EE, but DW has one from 1944! We will hand it down to the kids. No good reason not to ccsh it in.

 

[Eagle43]

I've got a stack of EEs and i-bonds accumulated over 40 years. I cash them in as they mature. Problem is, lots of them will mature after I'm dead unless I live well past 100 years.

 

[beowulf]

Don't have a clue if it is EE, but DW has one from 1944! We will hand it down to the kids. No good reason not to ccsh it in.

Actually, there is. It initially matured in 1964, but I believe bonds from that era received another 10 year extension to 40 years. It hasn't earned interest since 1974. I don't know the initial value, but it's now been 74 years since it was issued. It could be worth quite a bit if it was a $100 bond. Much less than that, not so much. My mother had a bunch of E bonds from the war, held them to final maturity, converted them to H or HH bonds (good for 20 years) and I held them until they matured. Paid taxes on the proceeds and bought I bonds. 75 years of growth had amount to quite a bit, even though the interest rates were never that high.

 

[Southern Geek]

The first of my stash of 100 EE/I bonds matured 2 years ago. When I went to my Credit Union to redeem it, the teller remarked that it was the first time he had ever redeemed a bond that had reached maturity. He said most redemptions occur long before the bond matures. I told him to get use to it as I would be redeeming a matured bond every quarter for the next 25 years.