Treasury initiative to encourage redemption of matured savings bonds
The Treasury Department’s Bureau of the Public Debt (BPD) has launched an initiative to reach holders of 39 million outstanding Series E savings bonds purchased between 1941 and 1978.
Worth more than $16 billion, the bonds stopped earning interest 30 or 40 years after their issue date. As a result, bondholders are continually losing money because of inflation. In a time when many Americans are feeling financially squeezed, redeeming the bonds and reinvesting the proceeds in new savings vehicles, or using them to pay down bills, may be in the bondholder’s best interest.
Additionally, old bonds can be worth considerably more than their face value. A $100 Series E savings bond purchased for $75 in 1960 would be worth more than $700. As tens of millions of Americans have participated in bond purchase programs (either through work or school in the 1950s to 1970), there are undoubtedly families and individuals holding thousands in unredeemed, matured bonds.
To date, the BPD has successfully contacted nearly 50,000 bondholders, a labor intensive and costly process. Even when bondholders are found, there is often resistance to cashing in old bonds. Some of that resistance is sentimental. For example, many baby boomers participated in the former Savings Stamp program in elementary school, and they look on these bonds as a link to their childhood. Still, other bondholders express worries about tax liabilities. For the vast majority, this is not a significant issue, as few would have enough interest income from the bonds to push them into a higher tax bracket.
To educate the public and streamline the redemption effort, a dedicated Web site has been established to help Americans identify mature bonds: www.treasuryhunt.gov (Off-site link).
By entering the Social Security Number at the Web site, visitors can find out if they have outstanding matured bonds that have been issued since 1974. Even if the original owner of the bond is deceased, the legal heir can still claim the money. Bonds issued prior to 1974 can also be located by following the instructions on the site.
Visitors to Treasury Hunt® will find other valuable information on the site, including a calculator to help determine the wealth of old bonds, and guidance on cashing bonds in at their local financial institution.
Financial institutions can play a critical role in aiding the matured savings bonds redemption efforts. By conducting an outreach program – especially targeting customers who are 50+ years of age – financial institutions can be instrumental in unlocking a valuable asset for their customers, while serving to help clear a nagging debt obligation from the books of the Department of the Treasury.
For more information, please reference the Federal Reserve Financial Services Savings Bond Resource Guide at Savings Bond Resource Guide Chapters.
