The United States has a lengthy history of selling bonds to fund previous wars. The United States government first marketed Series E savings bonds in 1941 as war savings bonds to support the Armed Forces’ efforts during World War II. Whether you purchased Series E bonds early in their history to help the war effort or later when they were sold as standard savings bonds, it’s a good idea to review what you need to do to cash them in now.
Savings bonds in the United States are meant to pay interest for a specific length of time. In the instance of Series E bonds, the Treasury specified a 10-year time frame for the bonds to appreciate in value. Later, authorities increased the interest-bearing length of E bonds from 30 to 40 years, depending on the bond’s issue date. Series E bonds were last sold to investors in 1980, and there are presently no E bonds that pay interest. The Treasury has recommended that all E bonds be redeemed as a result of this.
Paper Series E bondholders have two choices for cashing out their bonds. You can buy savings bonds at specific local financial organizations that are permitted to do so. You can also send them to the Treasury Retail Securities Site. On the TreasuryDirect website, you can find contact information.
The most significant need for redeeming bonds is to confirm your identify. If you’re a customer of a local financial organization, its policies may make identification a piece of cake. Non-customers can sometimes only redeem a certain amount at other institutions.
You’ll still need to establish your identity if you mail your bonds in. Your signature on the back of each bond can be certified by a certifying officer at your local bank. To comply with the tax requirements for redemption, you’ll need to include your Social Security number in the letter, and the owner of the bond will have to pay taxes on the interest earned on the savings bonds during the time the owner had them.
Are war bonds still redeemable?
Because war bonds are nontransferable, you won’t be able to cash one that isn’t in your name. There are a few exceptions, such as if you are the parent of a minor who is designated as an owner or co-owner, as a beneficiary, or as a legal agent demanding payment.
Is there any value in vintage war bonds?
The United States Treasury’s savings bond website includes a fantastic, user-friendly “Savings Bond Calculator” that will determine the value of your bonds for you. It will value U.S. Treasury E, EE, and I bonds, as well as savings notes.
If your bonds are Series E bonds, which were used to fund World War II, the calculator estimates that they are worth at least $3,600 each, for a total of more than $43,000 USD.
You don’t say how you got them, but before you start licking your chops, consider the tax implications of redeeming these bonds.
What is the procedure for redeeming Series E war bonds?
Log in to TreasuryDirect and follow the on-screen instructions. Within two business days after the redemption date, the cash amount will be credited to your bank or savings account. There are two options: Whether you have a local bank account and it accepts savings bonds, inquire if it will accept yours.
What are your plans for war bonds?
A war bond is a government-issued financial security that is used to fund military operations during times of war or conflict. Because war bonds gave a lower rate of return than the market, investors were enticed to lend money to the government by making emotional appeals to patriotic citizens.
Where can I get a war bond cashed?
During World War II, your parents or grandparents may have acquired government bonds to assist fund the country’s war effort. In the 1940s, these bonds, legally designated as Series E Savings Bonds, were simply referred to as “war bonds.” You could buy a $100 bond at a discount, say $75, and then redeem it when it matured at full value. There were both larger and smaller denominations available. Bonds that were held past their original maturity date continued to generate interest for another 40 years, and are now worth several times their face value. Many banks including the US Treasury Department accept war bonds for redemption.
What is the procedure for cashing a war bond that is not in my name?
If you merely want to cash in a bond that you planned to give as a gift to someone else, contact your local Federal Reserve Bank or branch and get the “Request for Refund of Purchase” form. You will be entitled to a refund of the amount you paid for the bond, plus any accumulated interest, if you complete it and follow the other instructions. The Southern California office is located at 950 S. Grand Ave., Los Angeles, CA 90015.
Q: I’d like to purchase large-denomination US Treasury notes with three other investors. My broker, on the other hand, claims that he can only take one taxpayer identification number on the purchase. If there is only one tax ID number, how can we all handle our various tax duties for the interest these notes pay? Also, how do I contact the Association of Individual Investors? James C.
A: To answer your first question, there are two rather simple options. The simplest option is to form an investing partnership with the four of you and use the partnership’s taxpayer identification number to make purchases. The partnership’s terms will specify how the stake will be split. On their own tax returns, the four investors should disclose their individual shares of the interest payments.
Is there any value in German war bonds?
Bonds like the ones unearthed by Smerilli were issued by a cash-strapped German government struggling to pay restitution costs following WWI. Hyperinflation was depreciating the mark at the time, and Germany’s economy was on the verge of collapse.
Photographs of individuals carrying wheelbarrows full of cash that was scarcely worth the paper it was printed on appeared in German newspapers.
Smerilli discovered bonds in a variety of denominations that describe a sequence of interest payments in the form of tear-off interest coupons that can be cashed at particular times.
A 50,000-mark bond issued in 1922 is among Smerilli’s holdings. The interest was never collected because the redeemable tear-away portions of the documents remained intact. Of course, the bond was likely worthless anyway due to the depreciation of the German currency at the time. Germans were using money as wallpaper by 1923. Their money has to be replaced at some point.
“They’re unique in that the coupons were never clipped,” Barber explained. “As a result, whomever put them away knew they wouldn’t be of any use. I’d be interested in purchasing them, but not for a high price.”
Smerilli has no idea who placed the bonds in the safe. The former owner of the house, according to neighbors, was a notorious hoarder, but another owner did serve in WWII, although it’s unclear whether he was the one who buried the bonds within the safe.
Whatever the case may be, Smerilli insists he will not sell them and is open to proposals.
“Who knows, maybe the right guy will show up with a briefcase, and we can take it from there,” he said.
When cashing in savings bonds, how do I avoid paying taxes?
Cashing your EE or I bonds before maturity and using the money to pay for education is one strategy to avoid paying taxes on the bond interest. The interest will not be taxable if you follow these guidelines:
- The bonds must be redeemed to pay for tuition and fees for you, your spouse, or a dependent, such as a kid listed on your tax return, at an undergraduate, graduate, or vocational school. The bonds can also be used to purchase a computer for yourself, a spouse, or a dependent. Room and board costs aren’t eligible, and grandparents can’t use this tax advantage to aid someone who isn’t classified as a dependent, such as a granddaughter.
- The bond profits must be used to pay for educational expenses in the year when the bonds are redeemed.
- High-earners are not eligible. For joint filers with modified adjusted gross incomes of more than $124,800 (more than $83,200 for other taxpayers), the interest exclusion begins to phase out and ceases when modified AGI reaches $154,800 ($98,200 for other filers).
The amount of interest you can omit is lowered proportionally if the profits from all EE and I bonds cashed in during the year exceed the qualified education expenditures paid that year.
Is it possible to cash savings bonds that are not in your name?
When it comes time to cash in your savings bonds, as long as you have the necessary documentation, the process will be relatively simple. It’s important to keep in mind that savings bonds cannot be sold, exchanged, or given away. The only person who can cash in the bond is the person whose name is on it (with a few exceptions, which we’ll discuss shortly).
First and first, you’ll need the bond (unless it’s an electronic bond, in which case there’s no step at all). The monies are deposited into your bank account once you cash it in via the Treasury Web site). However, make certain that the bond may be cashed: It’s been at least a year since it was published (some bonds only require a six-month retention period).