Do You Know What Interest Rates Your Savings Bonds Are Earning?

It’s likely you have no idea the interest rates your savings bonds are earning. Here’s why.

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There is a lot of confusion regarding savings bond interest rates, especially regarding older, very popular, paper Series EE Savings Bonds.

Unless you own EE bonds issued since May, 2005, your savings bonds interest rates will likely vary. Since savings bonds were issued, the U.S. Treasury Department changed interest rates and the applicable rules & regulations to attempt to make savings bonds an attractive investment.

U.S. financial market conditions – which are usually tied to the Treasury Securities rates – were often a main factor in determining interest rates for savings bonds. However, the government created  different formulas, which are confusing to the average investor. Even Einstein would likely scratch his head trying to remember them.

Interest rates FOR NEW BOND PURCHASES are announced every May 1 and November 1. These interest rates do NOT necessarily apply to previously purchased bonds.

Savings Bonds interest rates fall into four categories based on when the bond was issued:

1. Before May, 1995
2. May, 1995 through April, 1997
3. April, 1997 through April, 2005
4. After May 1, 2005

Sounds Confusing? A complimentary savings bond calculator will simplify the process by providing the current interest rate a bond is earning – along with current cash in values, maturity and (potential) tax implications, along with a “what this means to you” explanation. The expression “tell me the time, don’t tell me how you built the watch,”applies here.

To learn more about savings bond interest rates, including current savings bond rates, go to the Bond Information section at http://www.SavingsBonds.com.

SavingsBonds.com’s complimentary  calculator provides current values, interest rates, financial, timing and tax information via a color-coded, Savings Bond Inventory Report including a “what this means to you” explanation. For bond management services, updated values along with important maturity and tax alerts, via monthly e-Bond Statements, sign up for a free 14 day trial of SavingsBonds.com’s unique VIP Membership.

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Should You Redeem Savings Bonds To Pay Off Credit Card Bills?

happy-woman-computer

Summer may be unofficially over, however, paying the price for months of costly fun and vacations is just beginning. Redeeming U.S. Savings Bonds could be a smart option to help pay off those bills.

Bond owners should take their bonds out of storage, dust them off, go a complimentary online calculator and learn cash in values, interest rate performance, and total interest earned amounts for each bond.

Most investors don’t realize that U.S. Savings Bonds do not all perform the same, nor do they earn the same rate of interest.

The month and year of issue and the series of bond (E, EE, I) will determine the interest rates, rules, regulations and performance for each bond.

Once educated on values and performance, investors should carefully consider redeeming some lower yielding bonds – or use the SavingsBonds.com Cash In Report© – which takes out the guesswork and identifies the best bonds to cash in first.

According to SavingsBonds.com, bond owners claim they purchase savings bonds for college and retirement purposes. However, bonds are often cashed in early to pay off debt and used for rainy day expenses, such as for home repairs, cars or vacations.

Unfortunately, uneducated bond owners often hastily redeem the wrong bonds resulting in irreversible costly redemption mistakes. Additionally, they are not aware that a 1099-INT will be issued for all of the interest earned for each bond redeemed.

“Never arbitrarily cash in any savings bonds,” says marketing director Jackie Brahney of SavingsBonds.com. “Obtain current values, interest rates and total interest earned amounts for each bond by using a complimentary calculator before you rush down to the bank to redeem.”

Redeeming lowest interest rate earning bonds in ones inventory, rather than carrying high interest credit card balances for years might make financial sense. Accessing an on-line savings bond calculator and the SavingsBonds.com Cash-In Report© to quickly and easily identify which bonds to hold and which to redeem is a smart move.

The SavingsBonds.com complimentary calculator provides a printable, color-coded, Savings Bond Inventory Report along with a “what this means to you” explanation. For ongoing savings bond management & updated bond values via unique monthly e-Bond Statements, try a free 14-day trial of the SavingsBonds.com VIP Membership which includes a helpful Cash-In Report©.

By: Jackie Brahney, Marketing Director, SavingsBonds.com

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Three Savings Bond Beneficiary Facts

bank-teller

The word “Beneficiary” or “POD” (paid on death) printed on paper bonds essentially means the same thing.

Here are three important facts to know:

1. Beneficiaries cannot cash in bond(s) until after the death of the primary owner. Beneficiaries must show proof of the passing of the primary owner (normally a death certificate) when redeeming.  Call the bank or financial institution to learn what documents they required, and daily maximum redemption amounts.

2. A beneficiary does NOT have to cash in the bond(s) in a specific time frame after the death of the primary owner.

3. Most financial institutions will issue a 1099-INT – either on the spot or within the first two months of the following year – for all of the interest earned for each bond – REGARDLESS if interest had already been reported by the primary owner. They will likely use the social security of the person who redeems the bond.

IMPORTANT: While not a common practice, it would be wise to determine if the owner of the savings bonds has already reported annual interest earned on any prior years tax returns. If so, obtain all the tax returns for the applicable years that the annual interest earned was reported to avoid a potential  “double taxation” situation.

SavingsBonds.com’s complimentary calculator provides current values, interest rates, financial, timing and tax information via a color-coded, Savings Bond Inventory Report including a “what this means to you” explanation. For bond management services, updated values along with important maturity and tax alerts, via monthly e-Bond Statements, sign up for a free 14 day trial of SavingsBonds.com’s unique VIP Membership.

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101 On Re-titling Matured Savings Bonds

The Treasury Department will NOT re-title bonds into another persons name if the bonds have already reached final maturity OR if the bonds are within one month of their final maturity.

bond-redemption

Most PAPER U.S. Savings Bonds – some Series E, all PAPER EE & I – will reach final maturity 30 years from the issue date printed on the front of the bond. Own older paper bonds that are nearing final maturity? Be certain they are titled correctly.

If re-titling paper U.S. Savings Bonds, qualifying bonds will be re-issued in electronic format only (paper format is no longer available).

Electronic bonds require that an online Treasury Direct Account(s) to be set up. Setting up a Treasury Direct account requires that you provide personal & banking information.

There are likely tax ramifications associated with removing the primary owners name off of a savings bond.

To learn final maturity dates, go to SavingsBonds.com’s complimentary calculator and review maturity information on your complimentary, personalized, color-coded, Savings Bond Inventory Report. SavingsBonds.com VIP Members will receive 3-month advance notifications if their portfolio contains bonds that are about to reach final maturity.

SavingsBonds.com’s complimentary calculator provides current values, interest rates, financial, timing and tax information via a color-coded, Savings Bond Inventory Report including a “what this means to you” explanation. For savings bond management services & updated values via monthly e-Bond Statements with important alerts, sign up for a free 14 day trial of SavingsBonds.com’s unique VIP Membership.

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Why did they issue Patriot Bonds?

To improve sales of EE bonds, “Patriot Bonds” were introduced and issued on December 11, 2001, coinciding with the three month anniversary of the September 11 terrorist attacks.

patriot-bond These paper Series EE bonds were inscribed with the words “Patriot Bond” and operate the same as traditional paper EE bonds which were issued at the same time. Proceeds of the Patriot Bond went into the Treasury’s General Fund which contributed to fight the war on terrorism. This was a similar sales tactic used for selling “War Bonds.”

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Three Things Savings Bond Co-Owners Should Know

1. If the word “Or” with two names is printed on a paper savings bond – it is considered to be registered as a “co-ownership” bond.

2. Primary and Co-owner have equal rights to the bond.

Either person named on the bond can cash in the bond without consent of the other. That is NOT true with electronic bonds.

3. The person who redeems the bond will likely have to report all of the interest earned on their tax return (unless the other owner has previously reported interest)

Young Couple In Love Outdoor

SavingsBonds.com’s complimentary http://www.SavingsBonds.com/calc provides current values, interest rates, financial, timing and tax information via a color-coded, Savings Bond Inventory Report including a “what this means to you” explanation. For savings bond management services & updated values via monthly e-Bond Statements with important alerts, sign up for a free 14 day trial of SavingsBonds.com’s unique VIP Membership.

 

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What Does POD Inscribed On Paper Savings Bonds Mean?

middle aged holding bonds

POD or “Paid On Death” and “Beneficiary” mean the same thing on paper savings bonds.

Important Points to Know About POD:

  •  The person named POD or beneficiary will become the sole owner of the bond ONLY upon the death of the primary owner.

  • When the POD cashes in the bond, they will be entitled to the entire proceeds of the bond since the date of issue.
  •  Call ahead to the financial institution (i.e. bank) ahead of time and find out what legal documents they will require to redeem the bank, and the daily redemption limits they may have especially if you are not a customer of the bank. You will likely need a copy of a death certificate of the person or a copy of the will indicating that you are entitled to the bonds upon the passing of the primary bond owner.
  •  It is likely the bond recipient will have all of the interest earned amounts reported on a 1099-INT regardless if interest earned amounts were already posted.

  •  The POD should also be aware in the rare case if interest-earned amounts on the bond(s) was already reported by the primary owner – the beneficiary should obtain copies of tax returns to avoid a “double taxation” issue.

SavingsBonds.com’s complimentary http://www.savingsbonds.com/calc  provides current values, interest rates, financial, timing and tax information via a color-coded, Savings Bond Inventory Report including a “what this means to you” explanation. For savings bond management services & updated values via monthly e-Bond Statements with important alerts, sign up for a free 14 day trial of SavingsBonds.com’s unique VIP Membership.

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