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Susan Tompor: Millions of savings bonds are collecting dust


This news story was published on February 27, 2012.
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By Susan Tompor, Detroit Free Press –

It is not often that I want to write Dear Abby a letter. But I sure wanted to jump into the conversation when I read an Abby column about a mother-daughter fight over U.S. savings bonds.

The mother refused to give the 30-year-old daughter a U.S. savings bond, according to the letter, that the girl’s grandmother had given her for a birthday.

The daughter thought the bond had matured to full value. But she’s likely wrong about that one. If the bond is not 30 years old, say she got it as a gift when she was 7 or 8 years old, it is still growing in value and earning interest.

Even so, I’ve got to ask: Mom, what are you thinking?

The daughter speculates that the bond was supposed to be for a wedding gift and she’s not married yet. And maybe her mother still feels like Grandma, who died some time ago, remains around in spirit if the bond isn’t cashed.

Abby’s response: Have a heart-to-heart with Mom.

My response: Talk to Mom, but research that bond anyway and get your money. You can even claim it’s lost and maybe get a replacement from the federal government.

About $15.8 billion is just sitting there uncollected in U.S. savings bonds that no longer earn any interest, as of Jan. 31.

About 44.7 million U.S. savings bonds are doing nothing but collecting dust.

When you think about unredeemed U.S. savings bonds, you’ve got to believe that some of them could be unredeemed because of family feuds.

One person knows a bond was given as a gift but doesn’t want to turn it over to a son or daughter anymore because that child is foolish with money or is on the outs with a parent, grandparent, aunt or uncle.

What should you do if you think someone bought a bond for you but you can’t find it — or Mom won’t give it to you?

I’d recommend starting out at http:///www.treasurydirect.gov.

Daniel Pederson, who blogs on savings bond issues at BondHelper.com and is the author of the book “Savings Bonds: When to Hold, When to Fold,” said he wanted to contact Dear Abby’s Jeanne Phillips when he saw her advice.

He thought there were more options than just a heart-to-heart conversation.

He would recommend suggesting that the mother could make a color copy print of that bond to hold onto memories of the grandmother. If the mother saw the bond as a way to remember Grandma, she could have a photocopy.

Once she made that copy, she could write some words on the back like: “Copy of the original; bond given to daughter.” That way there’s no confusion down the line.

He said Mom should likely hand over the bond. It’s wise to give the daughter the bond to cash, as it may not be earning interest. And if the daughter is named on the bond, it is her bond, assuming Mom is not named on the bond, too.

“The bottom line is the daughter is technically the owner of that bond,” Pederson said.

If Mom doesn’t part with that bond, the daughter could claim it as a lost bond, he said, and could get it replaced.

Family members should try to find lost bonds and might find help via Treasury Hunt. It’s smart to do such searches if you have aging parents, a relative who passed away or even moved around a lot. Here are two steps for finding lost bonds:

—See the Treasury Department website to hunt for a lost bond: www.treasuryhunt.gov.

Enter your Social Security number and if you’ve got a bond in that limited Treasury Hunt database, you’ll receive an e-mail alert. But that online search only identifies savings bonds that have reached final maturity and were issued in 1974 or later.

—The surest way to search for possible lost or stolen bonds is to contact the Treasury and submit Form PD F 1048, a six-page form with instructions. You can download that form at TreasuryDirect.gov or BondHelper.com.

It may take some extra time, but it’s worth it.

The Treasury’s Bureau of Public Debt said it doesn’t have figures indicating whether more people are claiming lost bonds. But based on data for the first four months of the current fiscal year, searches in Treasury Hunt are on pace to exceed the 3.1 million the previous fiscal year from October 2010 through September 2011.

There were approximately 89,000 possible matches of matured, unredeemed savings bonds, according to Joyce Harris, director of public and legislative affairs for the bureau.

For the first four months of the current fiscal year, from October 2011 through January 2012, customers searched Treasury Hunt 1.5 million times with approximately 84,600 possible matches of matured, unredeemed savings bonds, she said.

The Bureau of Public Debt holds the position that bonds are considered personal property.

Pederson said that if a person is named on the bond and does not have it in his or her possession, it could be claimed as a lost bond.

So he would suggest doing a search if you’re not certain.

Over the years, we’ve wondered at times whatever happened to those savings bonds that Grandma bought me or what happened to those bonds I bought when I first started working. It’s good to know there are options for searching for lost bonds other than just rummaging through the attic.

———

MORE DETAILS: TIPS ON SERIES HH BONDS

—Be sure to check your bank account on the issue date of the bonds — see the top right corner of the bonds for the issue date — and six months later to make sure you are receiving your interest payments.

—If you have Series HH Bonds, pay attention to what rates you’re getting lately. Don’t be surprised if you start to notice you’re receiving less interest deposited directly into a checking or savings account.

Many HH bonds were paying 4 percent for the first 10 years of the HH bonds, but the rate is now dropping to 1.5 percent for the next 10 years, said Daniel Pederson, who blogs about savings bond issues at www.bondhelper.com. If you’re used to $1,000 in interest every six months, for example, the change means you’re now seeing $375, instead. Pederson said the last of the HH bonds that paid 4 percent for the first 10 years were issued in December 2002.

—If you cash a Series HH bond, do so after the six months of interest has been credited to you.

—Pay attention to taxes when you plan to cash in the bonds. The amount of deferred interest from the old bonds you exchanged is printed on the face of the HH bonds. You will receive a 1099 for the amount of interest when the HH Bond is redeemed.

—As of September 2004, the U.S. Treasury stopped issuing HH/H Savings Bonds. Investors are no longer able to reinvest HH/H Bonds or exchange EE/E Bonds for HH Bonds.

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