I finally took the plunge and sold off all our EE Savings Bonds! I’ll be sad to see them go, but I sure won’t miss the minuscule interest ;) Plus, it’s been on my to-do list ever since March’s net worth review, so it feels good to finally cross it off now. In fact, it also spurred accomplishing another item on that list – opening up a Roth IRA for the Mrs.
And oddly enough, converting the bonds literally only took 17 minutes! It took me some time to actually *find* a bank that would do it right there in person (you win Bank of America!), but it was well worth it in the end. This is how it went down:
– Walked into Bank of America (with a smile)
– Explained to the teller what I wanted to do. (with a smile)
– Signed and addressed the backs of all bonds in front of her. (no smile as it was pretty tedious)
– Got handed the $749.54 in cash and a printout of the transactions! (*huge smile*)
Again, if you’re considering converting any paper bonds yourself, do check around and see if you can find a bank locally that will handle it for you. I came super close to just doing it online with Treasury Direct and it did NOT look fun. We’re talking 1-2 weeks just to open an account (you do it online and then they mail you a card to activate/confirm your identity in the future), and then another 2-3 weeks to get them all converted (you have to physically mail them over and wait for a response)! I’m sure the process only takes seconds if you’re converting electronic bonds only, but I’d hate to imagine what would happen if you filled out the paperwork wrong and/or it got lost in the mail :(
Okay, so now we’re $749.54 richer and ready to go spend it, right?! Hah! Where do you think you are? ;) If there’s one thing I’ve learned over the years, it’s to keep re-investing your earnings and to make sure to do it fast. The longer that cash sits in your account, the higher the odds of it not going anywhere – or worse, being spent! (something the old me would have LOVED to do)
Needless to say, I had a plan for every last penny before it even hit my grubby little hands: our Roth IRAs. I really think we’ll earn a helluva lot more in stocks & mutual funds over the long run (the key factor) than we will in bonds, even though I certainly see the benefits of them. So $496.54 of the total is going to help max out MY Roth, since most of the bonds were issued to me over the past 29 years of growing up, and the remaining $253 will go into the Mrs’ Roth – being leftover of the $500 wedding present bond we got last year which will unfortunately never grow to fruition ;) I sorta feel bad for that one, but I’m an “all or nothing” kinda guy these days and I don’t want 1 single paper bond laying around to worry about, ya know?
That said, I’ll def. miss the nostalgia of those old boogers. The bonds dating back to the 80’s were so COOL looking! I remember thinking how rich I was when I was a kid ;) It was like sitting on 3 Nintendo Game Boys! haha…oh well, can’t hold on to them forever. I’d much rather have plumper IRA’s to look forward to now.
PS: If you want to learn more about the bonds you have, you can check them out at Treasury Direct w/out creating a login or anything – they’re excellent for tracking their worth and all :)
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You owe tax on all of the interest, FYI.
Yep! Had to google to confirm as it’s been a while since thinking about all this (you found a post 9 years old! haha…) but you’re right:
The interest that your savings bonds earn is subject to:
1) federal income tax, but not to state or local income tax.
2) any federal estate, gift, and excise taxes as well as any state estate or inheritance taxes.