Savings Bonds

Does anyone think now that uncle Sam did away with the actual paper savings bonds that in the future holders of these paper bonds will be holding on to something of intrinsic value? Vs. actual value?

 

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Original answer deleted. I had misunderstood the question.

 

If it exists, somebody will collect it.

But given the rather high face values (and often, even higher redemption values) of Savings Bonds, it's difficult to imagine that they'll be sufficiently widely collected to acquire collector premiums above their redemption values. Indeed, since Savings Bonds are payable only to the registered owner, it's quite possible that any examples that wind up orphaned in the collector market will trade for *less* than their nominal redemption value. I don't expect that anyone will ever make a profit by selling his own Savings Bonds to a collector rather than cashing them....

 

I did not know that the gummint has gotten so cheezy that they cannot print savings bonds anymore, when did that happen?

 

Last year I think; they said that Savings Bonds would basically electronic and they wouldn't issue paper bonds anymore (exception being anyone who bought them directly with their tax refund).

My concern would be, these bonds don't fully mature for 30 years. Remember what computers were like in 1982? OK now imagine what computers will be like 30 years from now. You confident that the data that stored your ownership of the bond will still be readable? Will you still remember how to access them? I have trouble remembering where I parked my car after I wander around in the mall for an hour. When I'm 66 will I remember my password for my online bond I bought 30 years ago? I honestly would prefer physical paper bonds stored in my safety deposit box. I think I'll still be able to find those.

 

Our family was real big on buying bonds for graduations, birthdays, weddings, anniversaries and every other significant date for a gift. Now that they went paperless, we buy ZERO. Uncle Sams loss I guess.

 

They still issue bonds.



The only way to get a paper bond nowadays is as part of your federal income tax refund.

 

You're right, here's the information. You can still buy them but it's all changed. Read the link. I don't buy them anymore anyways, I think I stopped in the early 1990's. My problem was cashing them right after my six month wait was over.

http://www.treasurydirect.gov/news/pressroom/pressroom_comotcend0711.htm

 

Hmmm...the Geithner signature on that bond is quite a bit different from the Geithner signature on currency. Maybe I'm mistaken (I don't have my bonds in front of me at the moment) but I think for past Treasury Secretaries, the BEP has used the same handwriting specimen for bonds as for currency. I wonder if there's a reason for the difference here...?

 

Don't quote me on this but I think savings bonds are printed by GPO not BEP.

 

I agree with the sentiments that the redemption value will likely always exceed any collector value for bonds in the hands of the original owners.

Now, there is a small but ardent group of people that I know that do collect US savings bonds. Collecting savings bonds is in its infancy as a hobby and until any definitive work of cataloguing varieties is done the market value of any particular issue is going to be speculative. There is more information and history for the market for the older style intaglio printed bonds (1935-1952 series) than there is for the later Hollerith card and lithographed types.

If you look at Ebay listings on any given day there are a fair number of savings bonds listed. Most of these are from unclaimed storage facilities or dead distant relatives. If you are patient you can pick them up relatively cheaply.

The one truly scarce variety of the late issues were bonds called Freedom Shares. They were issued for a brief time in the 1970s and few people bought them.

 

I agree with the general consensus. Make anything and someone will collect. I bet most people in the 1860's never thought that confederate currency would ever be worth much either.

 

After 30 years, most people don't have the capability to read punch cards, but they still used that technology:

I'm sure there were folks at the time saying "Man, in 30 years, will I be able to read this data punched into my savings bond?"

 

Not that they're that concerned about it anymore. US Savings Bonds haven't really been a major source of revenue for the government since World War II. Nowadays they only sell about $1 billion worth of savings bonds a year... a drop in the bucket considering the federal budget is well into the trillions. The bonds aren't so much as a significant way for the government to borrow money anymore so much as they're a way to encourage people to put aside long term savings.

If you really want paper bonds you can still get them out of your tax refund if you like (look for Form 8888 and its instructions, www.irs.gov ) but otherwise all bonds are electronic now. You can still register them in someone else's name if you want to give them as a gift (not sure if you can do that out of your tax refund though, don't think so) but the receipt looks less impressive when you give it to them sadly.

 

I could be worried over nothing lol but I just find having something physically in my hand more comforting than having it stored electronically somewhere; call me old fashioned if you like.

That picture reminds me of the savings bonds my father purchased for me shortly after I was born in 1976. He bought two $50 series D bonds (no longer issued) and gave them to me about the time they fully matured in 2006. I cashed them in and used the proceeds to buy more bonds. The $100 face value of the bonds were worth $426 in 2006. Pretty decent long term investment, and fairly safe (it about doubles your money if you adjust for inflation). Depends on interest rates, inflation rates, and how much faith you have the government will stay economically stable for the next 30 years lol... but assuming there's no major economic disaster it still beats putting the same amount of money under your mattress for 30 years. Been in the habit of getting $100 worth every year out of my tax refund for the last few years.

P.S. Banks don't have any way of reading the punch cards on those bonds anymore lol... but they were able to authenticate the bond and look up the redemption value easily enough.

 

I have some WWII war bonds that were my grandfathers, They were $25 paid value, I think the original purchase price at issuance was something like $18.75. I think when I checked on the Treasury website a few years ago they were worth a bit over $100 by then - the interest was stopped ca. 1982 or so. Maybe if the interest continued to accrue I would have cashed them in when I got them ten years ago - but I kind of like them as an unusual collectable and might frame them someday.

 

Found these in my safe a while back , have no idea where I got them from .

 

Lots of identifying info there. You might want to black it out.

 

Update and correction: Yes you can, I just checked out Form 8888 and you can designate part of your tax refund to buy savings bonds in someone else's name (see Form 8888 lines 4 through 6). Not sure if the recipient gets paper bonds or not, but they probably do, since they issue paper bonds when you buy them for yourself and/or your spouse this way. As I understand it the bonds are still physically delivered to you, so you can still present them as a gift however you like.

 

Would check with an authorized bond seller (almost every major bank in the US is one) to see what those are worth. Probably have a decent redemption value. They fully matured in July 2001. Are you that person (or an heir or beneficiary of that person) named on the bond? (They can only be redeemed by the person on the bond, a designated beneficiary if that person is no longer alive, or an heir of the person if that person is no longer alive and hasn't designated a beneficiary.)

That bond is still redeemable if there's still someone who has the ability to redeem them. Else, it only has value as a collectible.