- What are the benefits of trading my paper bonds in TreasuryDirect for electronic securities?
- I have bonds that I am entitled to, but they do not bear my name.
- Is it possible for me to exchange these?
- Will my bond be automatically redeemed and the interest earned reported if it matures after I trade it?
- What happens if I convert a paper bond that is registered solely in my name, as a co-owner, or as a co-owner with a beneficiary?
- Is it possible for me to show or cash my converted bonds to another TreasuryDirect account holder?
- What happens if I exchange a paper bond in the name of someone else, including a minor?
- Will the issue date of my electronic securities match the issue date of the paper bonds I submit?
- Will the interest rate on my electronic securities be the same as on my paper bonds?
- Will the maturity period of my electronic securities be the same as that of my paper bonds?
- Is the minimum holding period for electronic securities the same as it is for paper bonds?
What is the SmartExchange conversion feature within TreasuryDirect?
Holders of paper Series E, EE, or I savings bonds can trade them in for electronic securities of the same series and issue dates in a special Conversion Linked Account within their TreasuryDirect online account using the SmartExchange function.
TreasuryDirect accounts allow owners to buy, sell, and redeem Treasury securities electronically, 24 hours a day, seven days a week, using a secure Internet connection with the Treasury Department.
TreasuryDirect sells Series EE and I savings bonds, as well as Treasury bills, notes, bonds, and inflation-protected securities.
Who can exchange their paper savings bonds for electronic securities?
Any owner of a TreasuryDirect account, whether they are the sole owner, a co-owner, or an owner with a beneficiary. Owners of accounts can also trade paper bonds received as gifts for others, as well as bonds acquired through inheritance or other changes in ownership.
Account Managers for certain entities, such as trusts, estates, and businesses, can open TreasuryDirect accounts and convert bonds. See Entity Accounts are a type of account that is used to track the assets of a company. The registration of all securities in an entity account is the same as the entity account name. Documentary evidence may be required to support the transaction if the submitted bonds are not registered in the entity’s name.
What are the advantages to trading my paper bonds for electronic securities in TreasuryDirect?
Owners of electronic securities have more freedom and convenience than those who own paper securities. Consider the following scenario:
- Electronic bonds can be redeemed in full or in part at any time – 24 hours a day, 7 days a week and the funds put into the owner’s savings or checking account. On the next working day, the cash should be available. There is no need to visit a financial institution, and there are no limits on how many bonds or how much money can be redeemed at any given time if the basic conditions are completed.
- At any time, you can see your online holdings and their current valuations.
- There is no paper that can be lost or damaged by accident.
- Owners of accounts can modify the registration of their bonds at any moment or transfer the securities to another account (some ownership restrictions apply; transfers may result in a taxable event).
What bonds can I exchange?
You can convert Series E, EE, and I paper bonds that you possess alone, with a co-owner, or with a beneficiary. You can also convert paper bonds that you’ve received as a gift for someone else or that you’ve inherited or acquired through another means of ownership change.
Can I trade in matured bonds?
Yes, if you submit a matured bond, TreasuryDirect will automatically redeem the bond and deposit the funds in your Primary Account as a Zero-Percent Certificate of Indebtedness. You can utilize all or portion of the proceeds to buy additional securities or redeem the C of I for cash in your bank account. For the tax year in which the bond is redeemed or matures, the interest earned on it must be reported to the IRS.
Can I trade in bonds I’ve bought as gifts?
Yes, you can exchange bonds that you received as a gift. Any bond you’ve purchased in someone else’s name is considered a gift. The bonds are deposited in your Conversion Linked Account Gift Box once they have been converted. In an entity account, gift bonds are not available.
What happens to gift bonds I exchange that are matured?
Gift bonds that have reached their final maturity date are automatically redeemed by TreasuryDirect. Each bond redemption will be listed in your Conversion Linked Account Gift Box “matured gift profits” under the owner’s name. Similarly, if a converted gift security expires before you send it to the recipient, TreasuryDirect automatically redeems it and records a notation in the recipient’s account “proceeds from a matured gift.” From the Conversion Linked Account Gift Box, you can deliver the money to the owner. You’ll need the owner’s TreasuryDirect account number to deliver the funds.
Before you can give savings bonds as gifts, you must keep them in your TreasuryDirect account for at least five working days. Treasury is protected against loss by the five-day hold, which ensures that the ACH debit has been performed satisfactorily before the cash can be moved.
When you deliver gift money, the interest earned is reportable for that year under the recipient’s Social Security number. In entity accounts, gift bonds are not available.
I have bonds that I’m entitled to but my name isn’t on them.Can I exchange these?
Yes, you can trade in the bonds; however, you may need to provide proof of your transaction. After we get the bonds, we will contact you and give you the necessary information to finalize the transaction. In some cases, more processing time may be necessary.
When can I begin converting my bonds?
As soon as you create your Conversion Linked Account, you can start converting your savings bonds. To create the Conversion Linked Account, follow these steps:
- Navigate to ManageDirect and select “Establish a Conversion Linked Account” from the “Manage My Linked Accounts” menu. When you click on that link, you’ll be sent to a website with some information as well as a button.
- To create your Conversion Linked Account, click the icon. The Account Info page for that account will appear after you do so.
- Select the ManageDirect tab from the drop-down menu. A menu labeled ManageDirect can be found on the ManageDirect page “I’m in charge of my conversions.”
- Make a click on the “How to Convert My Paper Bonds” is a link that will show you how to convert your paper bonds. This page offers detailed instructions that will walk you through the entire procedure. We recommend printing this page so you can refer to it when you’re getting started.
Gather your Series E, EE, and I savings bonds and sort them according to their titles and connectors (“OR,” “POD,” or “beneficiary”). Grouping your bonds by registration will make the process of entering the bonds you want to convert much easier.
If you need to access your Conversion Linked Account at a later time, go to your principal Account Summary page and look for “My Converted Bonds” in the account listing under “Linked Accounts Information.”
When I trade in my bonds, will the interest earned be reported to the IRS?
No, the interest received on your bonds will not be reported to the IRS at the time of conversion if they have not reached maturity.
If my bond matures after I exchange it, will it be automatically redeemed and the interest earned reported?
Yes, unless you have arranged a redemption, TreasuryDirect automatically redeems your bond at maturity and acquires a Zero-Percent Certificate of Indebtedness with the proceeds once it is in electronic form. For that tax year, the interest collected on the security is reported to the IRS.
Should I sign the request for payment on the back of the bonds?
Please do not autograph your savings bonds on the back. We can convert the bonds because of your signature on the conversion manifest.
Is My Converted Bonds and Conversion Linked Account the same thing?
Yes. TreasuryDirect has assigned your Conversion Linked Account the name My Converted Bonds. You can change the name of your Conversion Linked Account by going to the Account Info tab, clicking “Edit,” and then entering a new name in the Personalized Account Name field.
What happens when I convert a paper bond registered in my name alone, as co-owner, or as owner with a beneficiary?
When the exchange is accepted in individual accounts, a security registered in the same way as a paper bond is released to Current Holdings in your Conversion Linked Account. All securities in entity accounts have the same registration as the entity account name.
What transactions can I conduct with the securities I trade in?
With two exclusions, you can engage in any electronic securities transaction. For a while,
A transaction to remove the name of a security registered in the names of two people as co-owners.
Because the consent of the other co-owner is required, it must be done offline.
by means of us Similarly, deleting the name of a Series E security’s intended recipient necessitates
As a result, we must handle that individual’s consent offline.
Can I let another TreasuryDirect account holder see or cash my converted bonds?
You can provide View and Transact permissions in TreasuryDirect. If you have the security registered in your name,
You can grant and remove View permissions to another TreasuryDirect account owner based on their name alone.
A security that is registered to you as the owner and has a beneficiary allows you to give and withdraw permissions at any time.
Only the chosen beneficiary has access to the information. If, on the other hand, it’s a Series E security with a
You can only grant View privileges to the selected beneficiary, and once granted, you can’t take them away.
The rights cannot be revoked. Similarly, you can give a co-owner of a property View and Transact rights.
You can’t reverse these powers after they’ve been granted. Registration as a co-owner
securities that have been given View rights can be changed to grant Transact rights, but not the other way around.
View. In entity accounts, View and Transactrights are not available.
What happens when I exchange a paper bond registered in the name of another person, including a
minor?
When the exchange is approved, the person receives a security that is registered in his or her name.
Gift Box in your Conversion Linked Account (whatever bond you’ve purchased in someone qualifies).
a gift under someone else’s name). If the electronic security contains the person’s Social Security Number,
You can send it to the recipient’s TreasuryDirect account online if you’re the owner.
We will assist you offline if the security does not bear the owner’s Social Security Number.
Prior to delivery, fill out the registration form. In entity accounts, gift bonds are not available.
How do I deliver a converted gift security?
The receiver must have a TreasuryDirect account in order to receive a converted gift security. If the converted gift security bears the owner’s Social Security Number, you can deliver it to the recipient’s TreasuryDirect account online by selecting it from the Conversion Linked Account Gift Box and following the delivery instructions.
Will my electronic securities have the same issue date as the paper bonds I turn in?
Yes, each electronic security will have the same issue date as the paper bond you provided, as well as the same current redemption value.
Will my electronic securities earn the same rate of interest as my paper bonds?
Yes, based on the series and issuance date, paper bonds and electronic securities earn the same rate of interest.
Will my electronic securities have the same maturity period as my paper bonds?
Yes, based on the series and issue date, paper bonds and electronic securities have the same maturity time.
Is the minimum holding period the same on electronic securities as paper bonds?
Yes, electronic securities and paper bonds have the same minimum holding duration. One year is the current minimum holding period.
How do I redeem my bonds after they are exchanged?
Via the same way that you request redemption of an electronic security purchased in TreasuryDirect, you can schedule a complete or partial redemption through your TreasuryDirect account.
In TreasuryDirect, what do the “Amount and “Current Value columns show?
The figure in the “The “Amount” column shows how much you paid for a bond. (This isn’t the bond’s face value if you converted a series EE bond from paper to electronic.) If you bought a $100 Series EE savings bond in paper form, for example, you would have paid $50. The “Amount” column in TreasuryDirect will show “$50” if you swap it for an electronic bond in a TreasuryDirect account.) The figure in the “The “Current Value” column displays the bond’s current value, which is comprised of the purchase price plus accumulated interest.
Is it possible to exchange EE bonds for I bonds?
NEWS: The new Series I savings bonds have an initial interest rate of 7.12 percent. I bonds can be purchased at that rate until April 2022.
- Is it necessary to get my signature certified if I cash my bonds by mail using FS Form 1522?
- Does it make sense to cash my old I bonds that were issued at a lower rate and acquire new I bonds when the interest rate on new I bonds is high?
- How can I find out what my I bond’s current interest rate and redemption value are?
- I observed savings bonds were being auctioned on auction sites like eBayTM, but I assumed they were non-transferable. What is the mechanism behind this?
If I cash my bonds by mail, using FSForm 1522, must I have my signature certified?
It is debatable. You can send us a copy of your driver’s license, passport, state ID, or military ID instead if the current redemption value of your bonds is $1,000 or less.
When the interest rate on new Ibonds is high, does cashing my old I bonds that were issued at a lower rate andbuying the new bonds make sense?
Notnecessarily. Your I bond’s rate fluctuates every six months, and it may be higher now than when you first bought it. A new I bond had a rate of 3.54 percent in May 2021, for example. A new I bond has a rate of 1.38 percent in November 2013. In May 2021, however, the bond issued in November 2013which had a rate of 1.38 percent at the timehad a rate of 3.74 percent. It has a higher interest rate than the bond due in May 2021.
How canI find the current interest rate and current redemption value of my I bond?
Go to your TreasuryDirect account to order an electronic I bond. Use the Savings BondCalculator to calculate a paper I bond.
How is the interest rate of an I bond determined?
- A fixed rate of return that does not change over the life of the I bond.
- Variable semiannual inflation rate for all urban consumers based on changes in the Consumer Price Index (CPI-U). The rates are announced by the Bureau of the Fiscal Service every May and November. The difference between the CPI-U statistics from the preceding September and March is the semiannual inflation rate announced in May; the difference between the CPI-U figures from the preceding March and September is the inflation rate announced in November.
The interest rate on an I bond is sometimes referred to as the composite rate or the overall rate because it combines two rates.
When are earnings added to the I bond?
I bonds gain value on the first of every month, and interest is compounded semiannually based on the issuance date of eachI bond. The issuance date of an I bond is the month and year in which the bond is fully paid.
What is the difference between EE and I bonds?
The EE bonds we sell now have a set rate of interest and are guaranteed to double in value in 20 years, regardless of the rate. Today’s I bonds earn a variable rate of interest that is linked to inflation; as inflation happens, the bond’s value rises. An I bond’s value isn’t guaranteed to rise to a set level.
Are there tax benefits to using I bonds to finance education?
Yes. You may be able to totally or substantially exclude savings bond interest from federal income tax under the Education Savings Bond Program. When you pay qualified higher education expenses at an eligible institution or through a state tuition plan in the same calendar year that you redeem eligible I and EE bonds issued in January 1990 or later, this can happen. When purchasing bonds, you are not needed to state that you intend to use them for educational purposes, but you must ensure that the program’s conditions are completed; some apply when the bond is purchased (s). See IRS Publication 970, “Education Tax Benefits.”
Electronic bonds as gifts
You can buy an electronic I bond as a gift for someone and keep it in your TreasuryDirect account’s “Gift Box” until you’re ready to give it to them.
You must submit the recipient’s Social Security Number if you buy an electronic I bond as a gift. To be able to transfer the bond to the gift receiver, they must first open or already have a TreasuryDirect account. A parent must open a TreasuryDirect account and link it to a Minor Linked account if the receiver is a minor. The gift bond will be delivered to the Minor Linked account. If the receiver does not have a TreasuryDirect account, you may keep an EE or Ibond that you bought as a gift until it matures.
Paper I bonds as gifts purchased with your IRS tax refund
I bonds make excellent gifts for a variety of events. A paper I bond can be mailed to you using your tax refund so that you can personally hand it to the receiver. Download a gift card when you purchase the I bond. On the I bond, the word “gift” will not display.
If you’re buying an I bond as a gift and don’t know the recipient’s Social Security number, just use your own. Despite the fact that your number will be printed on the bond, you will not be charged any taxes, and it will not go against your yearly purchase limit. The Social Security Number is only needed to trace the savings bond in the event that it is lost, stolen, or destroyed.
How do I file a claim for lost, stolen, or destroyed paper I bonds?
Write to Treasury Retail Securities Services, PO Box 214, Minneapolis, MN 55480-0214 to file a claim. You’ll have to fill out FS Form 1048. (download or order).
Before we can look for your security record, we need the following information:
- serial number of the bond If you don’t have the serial number for the bond, submit all of the following information, which may be on the bond(s):
Where can I bonds be redeemed?
You can redeem electronic I bonds through the TreasuryDirect program if you have them. You can cash paper I bonds at some local financial institutions or by mail if you own them.
When can I cash (redeem) an I bond if I need the money?
After 12 months, you can cash in your Series I bonds at any time. You’ll get your original purchase price plus any interest earned. I bonds are supposed to be held for a longer period of time; if you redeem one inside the first five years, you will forfeit the last three months’ interest. If you redeem an I bond after 18 months, for example, you’ll get the first 15 months of interest back.
Can EE or E bonds be exchanged for I bonds?
No, but you can sell your EE or E bonds and use the money to purchase I bonds. The interest on the EE or E bonds must be declared on your federal income tax return for the year they were cashed.
What are Gulf Coast Recovery Bonds?
From March 29, 2006, through September 30, 2007, Gulf Coast Recovery Bonds were issued. This special I bond designation was made to encourage continuing public support for hurricane recovery activities in the region. A clause in the Gulf Opportunity Zone Act of 2005 encouraged Treasury to make this designation. The proceeds from the sale of savings bonds went into the Treasury’s general fund and were spent pursuant to appropriations authorized by Congress and signed into law by the President, including those for Gulf Coast rehabilitation.
I noticed savings bonds are being sold through auction sites such as eBayTM, but I thought ownership was non-transferable. How does this work?
Savings bonds are sometimes marketed as collectibles or souvenirs. Because a savings bond is a registered security and ownership is non-transferable, the sale has no effect on the savings bond’s ownership. The owner or co-owners named on the bond still have a contractual connection with the US Treasury, not the individual who acquired the bond at auction. As a result, the person who purchases it at auction is unable to cash it; instead, he is purchasing a piece of paper displaying a bond that remains the property of the owner or co-owners specified on the bond. If the bond was lost and has since been replaced, it may be the property of the United States Treasury. Bottom line: Buying a savings bond at an auction is a bad idea because you don’t get any title or ownership rights to the bond.
EE bonds or I bonds: which is better?
If an I bond is used to pay for eligible higher educational expenses in the same way that EE bonds are, the accompanying interest can be deducted from income, according to the Treasury Department. Interest rates and inflation rates have favored series I bonds over EE bonds since their introduction.
What can I do with EE bonds that have reached maturity?
Your link has finally matured after three decades of waiting. If you wish to cash in your bonds, you must follow specific requirements depending on the type of bond you have (paper or electronic).
- You can cash electronic savings bonds on the TreasuryDirect website, and you’ll get your money in two days.
- Most major financial institutions, such as your local bank, accept paper savings bonds.
If you can’t find your fully matured paper savings bond, you can have it electronically replaced by going to the TreasuryDirect website and filling out the necessary papers.
You’ll need the serial number of the bond, which serves as a unique identity. If this isn’t accessible, you’ll need other information, such as the exact month and year the bond was purchased, the owner’s Social Security number, and the names and addresses of the bond’s owners. Even if you’ve misplaced the bond, it’s possible to find it with a few efforts.
You can keep your bond after it matures, but you will not get any extra interest. On the one hand, because you can’t spend a savings bond without redeeming it, the value of your bonds is considered “secure.” On the other side, if your bond isn’t redeemed, you’ll miss out on additional sources of interest. With current inflation rates, it doesn’t make much sense to hold a bond that pays nothing and is losing money to inflation every day.
Finally, regardless of whether you redeem your bonds or not, you will owe taxes on them when they mature. In the year of maturity, make sure to include all earned and previously unreported interest on your tax return. If you don’t, you may be subject to a tax penalty for underpayment.
Is it possible to roll over EE bonds?
Can I still avoid paying tax on Series EE US savings bonds I bought 10 years ago if I cash them in and put the money into a 529 plan? Yes, it is correct. If you meet all of the requirements for income-tax-free use of the savings bonds, you can roll them over into a 529 plan.
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.
Are EE bonds a good investment?
Because they give a guaranteed rate of return and, even if interest rates are lower, the savings bond will be worth twice its face value after 20 years, Series EE Savings Bonds are the finest gift, retirement planning, and portfolio diversification option.
When is the best time to cash in my EE savings bonds?
In about 30 years, most savings bonds stop earning interest (or achieve maturity). A savings bond can be redeemed as soon as one year after purchase, but it’s normally best to wait at least five years so you don’t miss out on the last three months of interest. If you redeem a bond after 24 months, for example, you will only receive 21 months of interest. It’s usually better to wait until your bond reaches full maturity, depending on the interest rate and your individual financial demands.
After 30 years, what happens to EE bonds?
Interest is paid on EE bonds until they reach 30 years or you cash them in, whichever comes first. After a year, you can cash them in. However, if you cash them before the 5th year, you will forfeit the final three months’ interest.
What is the value of a $100 savings bond dated 1999?
A $100 series I bond issued in July 1999, for example, was worth $201.52 at the time of publishing, 12 years later.
When you cash in your savings bonds, do you have to pay taxes?
Taxes can be paid when the bond is cashed in, when the bond matures, or when the bond is relinquished to another owner. They could also pay the taxes annually as interest accumulates. 1 The majority of bond owners choose to postpone paying taxes until the bond is redeemed.