Redeeming Series H/HH Savings Bonds

[…] How to redeem Series H/HH savings bonds […]

My morher inherited, by will, a $1000.00 HH Bond from my aunt. My mother has been in a nursing home for the last 6 years and in not competent to make decisions for herself. I have power of attorney. I would like to cash the bond and have the money direct deposited into her bank account. My bank says that they no longer handle this type of transaction. I have an official copy of my aunt's death certificate. I also had to pay the inheritance tax to my aunt's estate (as stipulated in her will) which I have paid with my personal check. I now have the bond in hand. How do I go about getting the cash money into her account?

Hi John - in general, you should follow the process described in the main article on this page.

At the bank, put your mother's bank account information on the Direct Deposit instructions. Also sign the form and the bonds something like "John Hamme, for Helen Hamme, under Power of Attorney dated…"

When you send in the bond for redemption, in addition to the bond with your certified signature, include certified copies of your aunt's death certificate, of the court document that states the bond was to go to your mother, and of your power of attorney.

The bank might also want to see all of these documents, as well as your personal ID.

In your answer to my previous question you said that I will need court documents that prove the bond was to go to my mother. On the bond that was bought by my aunt, her name is on the face of the bond along with my mother's like this–"POD (my mother's name) along with my mother's SS Number. Isn't that proof enough along with my aunt's certified death certificate and a copy of my Power of Attorney to get the bond redeemed and the money to be direct deposited into her account?

John - in your original question you said your mother inherited the Savings Bond "by will" and you didn't mention that your mother's name is also on the bond.

You are correct - these additional details change the answer to your question.

The POD on the Savings Bond registration overrides your aunt's will, so all you'll need to provide is your aunt's death certificate and your power of attorney.

I have spent much of the last week trying to get a bank to sign the back (as witness to my signature) of several HH bonds of which I am co-owner. There have been two sticking points. First, the back of the bonds reads (in part), "Authorizing certiying officers include officials and designated employees of financial institutions qualified as savings bond paying agents." When I have asked and been told that, yes, they do cash EE and certain other type bonds, they argue that the transaction is routed through a customer's account, and it's actually some other person in the bowels of the organization that OKs the redemption. Whatever.

The second issue is regarding the place on the back of the bond to the right of the "signature of identifier" line where an "Official Stamp or Seal" is to be placed. All banks I have checked with have said they lack something that small, and they wonder aloud if a notary stamp will do, or explain that their medallion stamp for certifying signatures on stock certificates or other documents is quite large and would not fit on the back of the bond. They demurr signing, saying they don't want to risk causing me problems in getting a Federal Reserve Bank to redeem my bonds because they've improperly filled out the back of the instruments.

Any suggestions?

Thanks.

Jim - the stamp for certifying signatues on HH bonds is the same stamp as the one used for any other type of Savings Bond.

Are they telling you that with, for example, EE bonds, the teller doesn't apply the stamp when the customer signs the Savings Bonds, but that it's applied by someone else at the bank later?

At any rate, in relation to your situation, my contact at the Treasury says, "This is basically a training issue, as bank personnel in branches rarely see HH bonds, so they often don't know exactly how to deal with them. In this case, the multiple excuses [instead of calling the Federal Reserve Bank 800# for instructions] make you want to scream."

You are going to have to call your bank and ask to speak to a manager. Calmly explain your situation and tell the manager that if they can't figure out how to handle this, you are going use the money from redeeming your HH bonds to open a new account at a bank that can. Then let them decide what they want to do and follow through.

Two of my sons were each given a $5,000 HH bond by their great aunt who has since passed away. Each bond lists their name OR their aunts' name, along with the aunts' SS#. The bonds were a gift, however, SHE was receiving the interest, by direct deposit, for the last several years and had been receiving a 1099 form under her SS#. We are interested in having both of these bonds cashed. The question is, do our sons have an obligation to pay tax on "deferred interest" that they have never received or are they simply taxed for the face value of the gifted bond? One son is still a minor, the other will be 19.

Joanne - yes, they will have to pay tax on the deferred interest. This interest was earned by the Savings Bonds that were converted into the Series HH bonds. The interest the aunt was receiving, and paying tax on, was earned by the HH bonds themselves.

It's not quite true that you sons won't receive the deferred interest - it's part of the $5,000 they'll get when they cash the bond. The $5,000 minus the deferred interest is the value of the original investment that they've inherited. The rest is interest that taxes have never been paid on.

Tom Adams

My dad passed away leaving HH bonds in his name and my mom's. We changed them to her name and mind using OR. She is primary and the bond lists her social security number. We want to redeem them but don't want to use her social security number due to the fact it will show up as income for her and raise her rent at the senior highrise. How can I redeem and use my social security number? Or do we have to change the bonds again?

Pat - The people who handle HH bonds at the Treasury use a different process than the EE/I bond group. The HH process follows IRS rules exactly and makes it impossible for your mother to get out of having the income reported under her SS number.

Tom Adams

my question is similar to Jim's back in Sept. We are trying to get a bank to sign/guarentee the HH bonds, but they don't know what to do with them. We've gone to Wells Fargo and they are not sure if their signature is sufficient. Wells Fargo can serve as a notary public…does that work? If not, where are we supposed to go to get these signed? Is there a list of special places to go?

Marcel - Under the assumption that you are planning to send these bonds in yourself (using the link in the article above), then there's no reason for the bank to refuse to certify your signature with a medallion stamp.

Notary Public stamps aren't enough and don't work. Any bank, savings and loan, or credit union can certify your signature with the required medallion stamp. The list is in your phone book.

If you are trying to get the bonds cashed at the bank, on the other hand, and not just a signature so you can send them in yourself, then banks can refuse to do that.

Tom Adams