Series EE Bonds, the common variety first issued in 1980 -- and still being issued today -- were designed to pay interest for up to 30 years. So any bonds dated 1988 or earlier – the first generation, so to speak – will have stopped paying by the end of 2018. At that point, their value is frozen, so there is no reason other than nostalgia to hang onto them. Instead, you can cash them in and put the money to more productive use.
Before the advent of Series EE Bonds, Grandma might have bought you a Series E Savings Bond. Those were issued from 1941 to 1980, and all of them have stopped earning interest, too.
The more recent Series I Bonds – the kind that pays a combined fixed and inflation-adjusted rate of interest – were first issued in 1998. They’re good for 30 years, so the earliest of them will stop gaining value in 2028.
How much unclaimed money is out there in the form of savings bonds that have stopped earning interest but have yet to be redeemed? The U.S. Treasury Department estimates that it’s in the billions of dollars.
What Your Bonds Are Worth
To determine the value of your old bonds, you can use the Savings Bond Calculator on the TreasuryDirect website. You’ll just need the type of bond, its denomination, and the date it was issued. There’s also a place to type in your bond’s serial number, but you don’t need that in order to get a value.
The calculator’s answer may pleasantly surprise you. For example, a $50 bond issued in August 1982, for which Grandma would have paid $25, is now worth $146.90. A $100 bond from February 1984 is good for $230.64.
If you believe you own some old savings bonds, but have lost track of them, you may be able file a claim for the bonds with the Treasury, by filling out Fiscal Service Form 1048, Claim for Lost, Stolen, or Destroyed United States Savings Bonds, available with instructions on the website. Unfortunately, the popular online tool Treasury Hunt was discontinued in early 2017.
How to Cash In
You can redeem your old paper bonds at many banks and other financial institutions. The TreasuryDirect website doesn’t maintain a list, but suggests you call around.
Bear in mind that savings-bond interest is subject to federal income tax, though not to state or local tax. You can either report it and pay tax every year that you hold the bond or wait until the end and pay the tax all at once, as most people do. After redeeming your bonds, you’ll receive an IRS Form 1099-INT, reflecting your taxable gain.
An exception, in certain cases, is if you use the proceeds from bonds issued in 1990 or later to pay qualified higher-education expenses for yourself or your child. Those rules, which include income limits, are explained in the Education Planning section of the TreasuryDirect site.
The Bottom Line
Don't sit on cash that's coming to you. But before you cash in your bonds, it’s a good idea to record what the Savings Bond Calculator says they’re worth, just to be sure you get every dollar you're owed.
Grandma wouldn’t want it any other way.