Are Series E Savings Bonds still earning interest?
Wednesday, March 22nd, 2006
Categorized as: Series E US Savings Bonds • Stinker bonds • Savings Bond interest rates
My parents have a number of Series E bonds. Can you tell me when they stop earning interest?
Series E Savings Bonds were issued from May 1941 through June 1980. The newer Series EE bonds, which are still available, were first issued in January 1980.
From their first issue through November 1965, Series E bonds earned interest for 40 years. All of these have stopped earning interest.
From December 1965 through the last issue in June 1980, Series E bonds earn interest for 30 years. There are still a few of these E bonds that are good, but in June 2010 there will no longer be any E bonds earning interest.
If your parent's bonds are still earning interest, they should start planning now to minimize the income tax impact of redeeming them. If your parents don't cash them, the IRS still wants the income reported in the year they stop paying interest. There are more details about how to minimize the tax impact in my book, .
(Average rating: 4.88 stars)
Loading ...
I have many, many Savings Bonds which I purchased thru payroll savings whils working for the FederalGovernment thru the 1960s, 1970s, and 1980s. Denominations are $25, $50 and $100. There are just too many to use your Savings Bond Calculator, doing them one at a time. The Treasury used to provide a publication which listed each month/year/denomination and gave the current value. I haven't seen one for some years now. Is it still available, and how can I get a current copy? Thanks in advance for a reply.
Dan Duffy
Daniel - all the ones issued before this month in 1978 have stopped earning interest so the value is the same as it was the last time you looked them up. It's a huge financial mistake to hold on to these; you should cash them and reinvest in new bonds.
I don't know if the Treasury still offers the publication you're looking for; their web site is impossible for finding anything useful. Why don't you use the link here to email them and find out how to get a copy?
Tom Adams
Tom, this sounds rather dumb, but I'm not a computer expert. How do I message them thru this site? And thanks for your response to my first question.
Dan
Dan - On this page, on the right, there's a box that says "Savings Bond Questions" in black and "Ask the Treasury" in blue or red. You may have to scroll up to see it. Click on the words "Ask the Treasury".
Tom Adams
Here is the link to the Treasury's Savings Bond redemption tables.
I am having trouble finding some US Savings Bonds that we "hid" several years ago when we had some family move in with us temporarily.
How can I go about getting duplicates to take the place of our "lost" bonds?
What info will we need to supply to Git R' Done?
One of them was issued in 1976 and should be done drawing interest and we will cash it or roll it over .
Please advise
Kenny - the information you're looking for is here.
Tom Adams
I have a book full of stamps. The cover says "OFFICIAL United states saving stamp album" The document number for this form is SBD-380-REV. 55 This had to of been purchased in the early 60's Can you tell me what it's worth?? Thank you
Lee - the info you're looking for is here.
Tom Adams
I have an E series bond purchased as a gift in 1977, I have not been able to find the person that the bond is made out to. How do I dispose of the bond?
Bryce - the info you're looking for is here.
Tom Adams
Tom since it appears you're in an answering mood recently (love the site, btw):
In 2008 my wife cashed out 4 Series E bonds that had matured (they were from 1972 & 1973), that her parents had bought for her and left in an old safe deposit box, only to be found last summer. Since they were incontrovertible to modern bonds, I just cashed them out. Face value of the bonds was $500,$500,$25, and $25 = $1050 total. The cash value we received was about $5800.
So what do I report as far as taxes go? Common sense tells me I should report $5800 - $1050 = $4750 as ordinary interest income on my federal return (and not on my state or local), and pay about 28% on that (about $1330).
Am I correct, or is there some other basis I should be using? Should the basis be 75% of the maturity value ($787.50), since that was what was paid to buy them? Some places I'm reading on the internet go so far as to suggest I should have paid taxes on it when they matured (2002 and 2003) and should amend my returns for those years. We didn't even know these existed until last summer, so that seems rather unreasonable.
One more kicker is that the 1099 form that I received from the US Treasury (where I redeemed these) shows nothing- "no reportable transactions" — for every box on every 1099 form (INT, B, OID). If it reported things nicely, I don't think I would have any question at all. But if the Treasury itself can't figure out what to do with these, how can I?
Thanks for reading, and hopefully answering. Keep up the good work.
Steve - you report what you received minus what was paid for the bonds, which as you note, for E bonds was 75% of the face value.
The 1099 you received from the Treasury doesn't include paper Savings Bonds. You should get a 1099 for the paper Savings Bonds from the bank where you cashed them.
Tom Adams
thanks Tom for the reply.
I redeemed them through TreasuryDirect, not a bank. My credit union does not buy or sell savings bonds, and none of the local banks in town would cash a bond over $1000 for someone without an account. I didn't want to open up an account just to cash them, so that's why I sent them (via registered mail) and cashed them directly with TD. They converted them into a CofI account, I fiddled with 4 week T-bills for a while, then just took all the cash out. So to be more accurate my 1099 is not entirely blank, it has about $10 in interest from the T-Bill activity, but none of the original $5k+ paper-to-cash conversion.
Seems to me I should probably call/write to TreasuryDirect and find out why my 1099 is wrong then?
Much thanks again.
Steve - As far as I know, what you describe isn't possible. What I suspect you actually did was send the bond in to a Federal Reserve bank, as described here, with instructions to deposit the proceeds in your TD account.
If that's the case, you'll get the 1099 from the Federal Reserve.
If you really did send the bond to TreasuryDirect and they redeemed a Series E bond for you like this (a Series E can't be converted to an electronic bond), that's actually pretty big news. They've never said they'd do that. And if they did, it sounds like their processes aren't mature, since they didn't get the interest on your 1099.
Tom Adams
I have several $1,000 E bonds ..o2/1977.they are in my children's name and mine. i know they have expired but i did not know that i had to redeem them or pay a penalty. How can i best handle this situation as i cannot afford to cash the bonds myself and pay the interest as i am 87 and now a widow. i do not need the money right now. Could you e-mail me a suggestion. Thank you. L.Ernst
Lauri - The cash to pay the taxes comes from the money you get when you redeem the bonds.
In other words, you cash the bonds and save back what you need to pay the tax on the interest. Since you don't need the money now, you reinvest what's left in new Savings Bonds.
The worst thing you can do is not cash the bonds. That's just a free loan to the government.
Tom Adams
My husband purchased some savings bond series E in 1969 - 70. I understand that they are no longer earning interest. If I redeem them, the taxes will be very high. I heard that if the bonds cashed for educational expenses (for my grandchildren), the interest will be non-taxible. Is it correct?
Could the bonds be converted to new bonds without paying taxes on the interest? Thank you for your help. Kuei
Kuei - Not only have your bonds stopped earning interest, they haven't earned interest for 10 years already.
The education deduction is not available for grandparents. There is nothing you can do to avoid paying the taxes.
However, had you cashed them when they stopped earning interest ten years ago and reinvested in new bonds, you would have earned more than the taxes you would have paid.
So although the taxes seem high, the truth is the tax is far less than loss you're taking by not earning any interest at all.
Tom Adams