Comments on: Penalties for not cashing mature savings bonds

by: Tom Adams

Tue, 16 Mar 2010 20:15:25 +0000

Al - about 50 cents. Fran - No, Savings Bonds aren't FDIC insured, they're issued by the US government. And the government would refuse to back the FDIC before it refused to back Savings Bonds. So what Savings Bonds have is better than FDIC insurance. Tom Adams

by: Fran N

Mon, 15 Mar 2010 22:35:16 +0000

Are bonds FDIC insured?

by: al

Sat, 13 Mar 2010 13:40:00 +0000

How much is the penalty if I cash a 1 year old 50.00 I Bond?

by: Tom Adams

Tue, 02 Mar 2010 16:19:39 +0000

Carrie - The information on the top of this page answers most of your questions. The best way to avoid the penalty of not earning any interest is to cash the bond.

Typically the 1099 tax form you receive after you cash the bond only has the year you cashed it, so amending prior tax returns isn't necessary. But if the 1099 is correctly issued with the year that the bond stopped earning interest, you will have to amend that year's return.

Tom Adams

by: Carrie

Mon, 01 Mar 2010 18:45:20 +0000

If you don't cash in but hold onto E and EE bonds when they mature, what is the penalty, and are there circumstances where the penalty can be avoided? Also, will it be necessary to amend the tax return for the year in which the bond matured, or can the taxes and any penalty be paid upon redempton without having to go back and re-file?

by: Tom Adams

Mon, 22 Feb 2010 15:51:51 +0000

Corrine - Interest stops 30 years from the issue date, so yours are good for a couple more years - until 2012.

Here's how to change the beneficiary.

Tom Adams