Is there a right way to cash in saving’s bonds?
So, you’ve got a huge stack of U.S. Savings Bonds to cash in and you’re wondering where and how you are going to do this. It’s pretty simple, really. Most banks and Credit Unions will cash series EE bonds and I for you, although they can’t cash series HH bonds. HH Bonds will be forwarded to a Federal Reserve Branch to cash in for you. You don’t have to wait until they are vested either.
You can have them Direct Deposited into your account by filling out a form that you can get from the Bank or credit union where you have your account. However, there may be a penalty for cashing them in early.
If you use your bonds to pay for college, the interest rate can be tax-exempt, so make sure that you specify at tax time what you are going to do with your earnings.
You will have to show proper identification and proof that you are able to cash these in as sometimes they can get lost or stolen. If the bonds are not in your name, you will have to have some proof that you are entitled to cash them. If you are a beneficiary, take a copy of the owner’s death certificate to the bank with you, preferably a certified copy, but sometimes, they will accept just an ordinary good copy.
If they belong to your children, you can sign for them by certifying that you are the parent of the child whose name is on the bonds or the person to whom legal custody has been granted.
If the bonds are in your name, you are automatically entitled to cash them at your own bank. If you are not a bank customer, you will have to show your driver’s license or some other form of identification. Even then, you will only be allowed to cash in $1,000 worth of bonds.
You can set up a direct account to the US Treasury’s website where you can set up a debit savings or checking account and have them directly deposited into it. You can buy, sell, and manage your bonds all from this one place. .
Before you cash them in, you may want to consider having them rolled into an IRA or other retirement account that is a tax shelter. A huge amount of income can result in your being in an entirely different tax bracket or table and can really cost. If you are buying bonds to save all that you can, have them put into a tax shelter when they are cashed.
To find out what they are worth, you may want to use the U.S. Treasury’s savings bond calculator: http://www.treasurydirect.gov/indiv/tools/tools_savingsbondcalc.htm.
You don’t want to cash them in too early, so, you can also call your bank and they can tell you what they are worth. If they haven’t yielded what you think they should, hold onto them a bit longer. So, enjoy your growing interest and make sure that you put it somewhere that can continue building interest for you.