Treasury Direct -- can't get my money out

[JB]

Given the low rate paid by iBonds I'm looking to redeem. I'm going to wait until 3 months after my rate drops so that I maximize return -- collect the 6.75% and give them the 2.41 for my 3 month penalty.

The problem is that Treasury Direct has a lock on my account. They said that they were unable to verify my identity when I signed up, and that I need to fill out a 5444 form and have my identity verified as idicated below.

The problem is that I don't have an account with a financial institutions that has a local presence -- they all suck.

I went over to the Bank of Hawaii and they said that I need a Medallion stamp and that they offer this service to people who have accounts for more than two years.

I went to the local District Court and they had no idea how to do this.

Any ideas?

THanks.





From Treasury Direct:

The following table lists the authorized certifying individuals and the required evidence of the individual’s authority.

Who can certify signatures in the U.S Evidence of certifying individual’s authority
1. Officers and employees of depository institutions
(i) We require the institution’s seal or signature guarantee stamp.
(ii) If the institution is an authorized paying agent for U.S. Savings Bonds, we require a legible imprint of the paying agent’s stamp.

2. Institutions that are members of Treasury—recognized signature guarantee programs (for security transfers only).

We require the imprint of the signature guarantee stamp, i.e., the STAMP, SEMP, or MSP stamp for members of the Securities Transfer Agents Medallion Program, the Stock Exchanges Medallion Program, or the New York Stock Exchange Inc. Medallion Signature Program.

3. Officers and employees of corporate central credit unions, Federal Land Banks, Federal Intermediate Credit Banks and Banks for Cooperatives, the Central Bank for Cooperatives, and Federal Home Loan Banks.

We require the entity’s seal.



4. Commissioned or warrant officers of the United States Armed Forces, for signatures executed by Armed Forces personnel, civilian field employees, and members of their families.

(i) We require a statement that the person executing the assignment is one whose signature the officer is authorized to certify under our regulations.
(ii) The certifying official’s rank must be shown.

5 A judge or clerk of the court

We require the seal of the court.

6. Other persons as designated by the Commissioner or Deputy Commissioner of Public Debt.

Evidence is determined by our procedures

 

[justin]

Maybe go down to the local courthouse and beg a judge, magistrate or clerk to sign and seal an affidavit saying you are who you are. Bring passport, SS Card, driver's license etc.

 

[JB]

I tied that. The clerk said she didn't know how to do it and that I need to talk with the court administrator who wasn't available. SHe gave me the guys number (who coincidentally has the same last name as the mayor) and told me to call next week. I called today and talked with his assistant (he's always in meetings.) The assistant asked him, and he said he had no idea how to do it. I have the Treasury Direct form 5444 which I need to sign and have verified.

 

[Cut-Throat]

I'm also moving mine out August 1st. - Which is probably the end of the 6.75% interest. I'm going to Emigrant Direct for the 4.8%

When and how did you find out you had this problem?

 

[JB]

I noticed when I tried to redeem some EE bonds a few weeks ago. You'll probably be OK if you've lived in the same place for awhile, but it may be worth checking.

I'm waiting until I receive 3 months of interest at the reduced rate to redeem. I don't want to give them the 6.75% interest payments back as penalty.

 

[maddythebeagle]

The problem is that I don't have an account with a financial institutions that has a local presence -- they all suck.

I went over to the Bank of Hawaii and they said that I need a Medallion stamp and that they offer this service to people who have accounts for more than two years.

I have rec. a lot of the medallion stamp guarantees. Use my credit union mostly and sometimes a bank. I am sure that you can find a bank that will allow you to do with a newer account. All the big evil ones like Bofa, wells fargo, us bank all do these for their customers. The big issue is getting an account quickly with any of them.

 

[Cut-Throat]

I noticed when I tried to redeem some EE bonds a few weeks ago. You'll probably be OK if you've lived in the same place for awhile, but it may be worth checking.

I'm waiting until I receive 3 months of interest at the reduced rate to redeem. I don't want to give them the 6.75% interest payments back as penalty.

Don't wait! - The interest that is witheld is on the front end. You will actually get what your account total shows. In other words the current interest rate is small and that is what you forfeit. I am still getting 6.73% until August 1 st.

 

[JB]

The Treasury Direct site says:

Before 5 years, forfeit 3 most recent months'interest

Doesn't this mean that I should wait for 3 months at the lower rate?

 

[Cut-Throat]

The Treasury Direct site says:

Before 5 years, forfeit 3 most recent months'interest

Doesn't this mean that I should wait for 3 months at the lower rate?

But you are! - If you look at your account it is awarded interest that is accrued 3 months ago (The higher stuff) - Once it is recorded to your account it is yours even if you accept the 3 month penalty. Interest is withheld for 3 months. So you are still getting the high interest rate until August.

 

[soupcxan]

But you are!  - If you look at your account it is awarded interest that is accrued 3 months ago (The higher stuff) - Once it is recorded to your account it is yours even if you accept the 3 month penalty. Interest is withheld for 3 months. So you are still getting the high interest rate until August.

Can anyone else confirm that this is correct? I had assumed that I would have to wait 3 months of the "low" rate before cashing in my bonds...was this wrong?

 

[cute fuzzy bunny]

The medallion sig thing makes me crazy. Vanguard requires it for some stuff. The last time I got one, the guy who did it was in the vault doing something and didnt want to come out, so he had the bank teller bring him the forms and he stamped them without ever setting sight on us.

I think many brokerages, along with banks and credit unions, will do a medallion stamp.

Email this guy and he can tell you where the nearest medallion provider is to you. You may need to become someones customer to get it.

contactkfs@kemark.com

http://www.sec.gov/answers/sigguar.htm

We keep an account with a local bank with about $150 in it just for crap like this.

 

[Cut-Throat]

Can anyone else confirm that this is correct? I had assumed that I would have to wait 3 months of the "low" rate before cashing in my bonds...was this wrong?

I contacted Treasury Direct on exactly this question. When you open an account they automatically withhold 3 months of interest from you up front. So when they deposit interest in your account it is basically 3 months late. When you cash out your I-Bond, you will get the amount that has been credited to your account.

Look at the interest you got last month. It's a lot higher than they are paying currently. That is because the interest is credited 3 months later.

 

[JB]

I asked them about this and they told me that the interest rate changes on the 6 month anniversary of my purchase. That's why I'm still getting 6.75%. I'll call and check again.

My account status says:
T08 - Awaiting Verification


CFB,
Thanks for the web link. I'll follow up w/ them.

 

[GTM]

I asked them about this and they told me that the interest rate changes on the 6 month anniversary of my purchase.  That's why I'm still getting 6.75%.  I'll call and check again.

My account status says:
T08 - Awaiting Verification


CFB,
Thanks for the web link.  I'll follow up w/ them.

JB, This is the way it works, Look at the issue date. Let say it March 2005.
March and September are the months your rate changes.

If you have a March bond you get the 6.73% in March, April, May, June, July and August.
September you get the new rate.
So for September, October and November you get the 2.1%.

Remember the interest is paid on the first business day of a month for the whole month so you may as well redeem the bond on the first day.

In this case a March bond should be redeemed November 1 with the penalty being 3 months at 2.1% (Sept. Oct. & Nov.) and you can invest the proceeds on November 2 somewhere else.

What issue date do you have?

You need to remember the fixed portion should be a consideration on whether you want to redeem the bond or not. I bonds issued in 2001 had a fixed rate of over 3%.

 

[Cut-Throat]

JB, This is the way it works, Look at the issue date. Let say it March 2005.

Remember the interest is paid on the first business day of a month for the whole month so you may as well redeem the bond on the first day.

In this case a March bond should be redeemed November 1 with the penalty being 3 months at 2.1% (Sept. Oct. & Nov.) and you can invest the proceeds on November 2 somewhere else.

Gerald,

You may be saying the same thing as I said, but for clarification: I asked the Treasury Direct on this. Once the interest is credited to your account, that is how much you will collect. The 3 month penalty is already factored in. Again the interest is posted to your account by a delay of 3 months.

 

[GTM]

Gerald,

You may be saying the same thing as I said, but for clarification:  I asked the Treasury Direct on this. Once the interest is credited to your account, that is how much you will collect. The 3 month penalty is already factored in. Again the interest is posted to your account by a delay of 3 months.

CT yes the value of any bond less than 5 years old already has the 3 month penalty factored in. You bring it to a bank teller they punch in some numbers and know exactly what the bond is worth. You bank account is credited good funds right then.

If the bond is older than 5 years the value does not carry a 3 month penalty so all 5 years of interest are in the value.

Treasury Direct has an online calculator where you enter the bond serial # and issue date and it gives you the total value of a bond as of the current month.

 

[LOL!]

We had no local bank when my spouse needed a medallion signature guarantee to transfer the account of her deceased mother.

Our local brokerage (TDWaterhouse) did not offer this service. I tried to use the local contact at MorganStanley who had all my 401(k) money and he balked.

Spouse had to open a local free-checking account with $1000, wait 30 days, then they gave her the medallion signature. Then close the account. I would say, shop around for banks that offer this.

 

[JB]

The Treasury Direct site says:

Before 5 years, forfeit 3 most recent months'interest

So is this wrong?

Say my purchase is in March 2005. I shouls sell November 1st and forfeit 3 months interest at 2.1%, and get all my 6.75% interest.

 

[GTM]

So is this wrong? 

Say my purchase is in March 2005.  I shouls sell November 1st and forfeit 3 months interest at 2.1%, and get all my 6.75% interest.

JB both statements are right. A bond less than 5 years old has the last 3 months interest excluded in the value.

If you redeem a March 2005 bond within 5 years you have to pay a penalty but that penalty is already in the current value.

Example you go to the bank July 3 and ask to redeem that March bond that has a face value of $10,000. The teller tells you it is worth $11,000 on that day. That figure is the original $10,000 plus interest for March 2005 thru April 2006. The May, June and July 2006 interest is not in the value.
If you go to the bank August 1 the value may be $11,100. That would include all interest from March 2005 thru May 2006. The forfeit interest for June. July and August is built in.

What you need to figure is what month can my bond be redeemd when the built in value has the lower interest rated as a penalty.
I guess it will always be the ninth month after the issue month. That should work.

 

[JB]

Thanks. That's what I thought all along!

I read my post again. I shouldn't have used the word 'received'.

 

[terminator]

Thanks Cut-Throat & Gerald. That was very helpful.

It also makes perfect sense. I always wondered why it seemed like the reported interest was less than I expected on those bonds - evidently because of the three month hold on the interest.

I have Sept I-bonds, so I guess I should hold until Nov 1st.

Also, right now, I can't see them selling too many savings bonds given the T-bill, CD and MMA rates. I would think they will have a lot of redemptions coming if people are paying attention.

 

[SC]

We ran into a similar problem after we switched to online banks - Vanguard or Fidelity required us to get a signature guarantee but no local bank would do that for us.
Now we keep around $250 in a savings account with a local credit union. They're happy to sign whatever we bring in and it only costs us a few dollars a year in lost interest payments. Plus, it gives us a place to take the occasional jar of loose change.

SC

 

[jondoh]

required us to get a signature guarantee but no local bank would do that for us.

That's curious. I was visiting Grants, NM a couple of months ago, and I had the paperwork from TD to transfer some of my Legacy Direct accounts to Treasury Direct, which required a signature guarantee.

I drove down main street (the old Route 66) saw a bank, went inside, told the bank officer what I needed, and a few minutes later the document was stamped. No charge.

 

[Martha]

Banks/Credit Unions are getting pickier about signature guarantees. I think it is all the patriot act stuff.

I would try what LOL suggests and open an account or two.

Otherwise, print out the stuff you got from Treasury Direct, find some lawyer in town who knows the judges to walk you directly up to a judge to get your signture certified. Skip the administative staff.

 

[maddythebeagle]

Banks/Credit Unions are getting pickier about signature guarantees.  I think it is all the patriot act stuff.

At least with stock transfers, it is about preventing fraud. Good thing for folks that want to protect their assets. And OP, I dont know how you can get by without a credit union membership at least. How do you get cash and quickly deposit your checks. There really is little to fear with a credit union...I have had great service with the 2 that I have used...banks on the other hand are there to drain you with fees