War bonds, like any other savings bond, are debt securities that pay interest over a set period of time. The following are some of the most important characteristics of war bonds:
- Their face value fluctuates depending on how much you spend up front: Each war bond had a face value ranging from $10 to $10,000, which is the amount you receive when the bond matures at the conclusion of its tenure. When it comes to the amount you pay up front, most war bonds cost between 50% and 75% of the face value.
- They are zero-coupon bonds: Unlike traditional savings bonds, war bonds pay no interest over the life of the bond. Instead, when you redeem this form of bond after it has matured, you get the full amount.
- They have lower interest rates: War bonds have lower interest rates than market bonds, making them a less-than-ideal savings instrument. Liberty Bonds, for example, had an interest rate of 3.5 percent when they initially went on the market, which was lower than the typical market interest rates at the time. This was one of the reasons why these bonds were used as a way to express your support for your country during a war, rather than just as a way to earn money.
- The duration of their maturity is determined by the year they were issued: if you bought the first defense bonds shortly before the United States entered WWII, you’d have to wait for the 10-year term to end before cashing out. Congress later extended the term of these bonds, allowing Series E bonds issued between May 1941 and November 1965 to earn interest for 40 years.
What are the current values of WWII 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 value of a $50 war bond?
Savings bonds are regarded as one of the most secure investments available. The underlying principle is that the value of a savings bond grows over time, but it’s easy to lose track of how much it’s worth over time.
The TreasuryDirect savings bond calculator, fortunately, makes determining the value of a purchased savings bond a breeze. You’ll need the bond series, face value, serial number, and issuance date to figure out how much your savings bond is worth.
If you bought a $50 Series EE bond in May 2000, for example, you would have paid $25. At maturity, the government committed to repay the face amount plus interest, bringing the total value to $53.08 by May 2020. A $50 bond purchased for $25 30 years ago is now worth $103.68.
Is it still possible to repay war bonds?
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 redeeming old war bonds?
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.
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.
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.
Is there any value in Confederate war bonds?
Bondholders were only able to receive interest for a few years, and only a small percentage of them ever saw their principal again. The South was deeply in debt by the end of the war, and the federal government refused to pay creditors, including bondholders. If there were any doubters, a court decided in 1924 that $120 million in bonds held by rich Britons were worthless. As financial tools, the bonds have no value today.
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.