Do you remember when you were younger and your grandmother had given you some series EE government bonds? Remember how exciting it was because of what it could mature to in the next several years? Or maybe you were like me, excited because what you thought you got was something that would be worth a lot of money some day. Now that you’ve gotten older, like I have, and you see the lackluster gain that these series EE bonds have really done for you, now you’re probably wondering what the heck you do with them.
Introducing the Series EE Bonds
First, a quick bio. Series EE bonds are issued by the federal government and offer an ultra-safe way to grow your money. Of course, being ultra-safe also means not ultra-return, but given their conservative nature, they are often competitive with similar other low risk alternative investments, such as CDs or high interest money market accounts. These paper EE bonds are sold half of their face value, which means that a $50 bond isn’t really worth $50. It’s worth $25 plus whatever interest that has accrued since it was purchased. If you have any bonds tucked away in a drawer or an old box or safety deposit box, you can go to savingsbond.gov and then type in the serial number of your bond to find out its accrued value. As far as what to do with them, you have one of three choices.
Cashing In The Series EE Bond
First, you can just cash them in. If you want to reinvest the funds with something with more growth potential or simply spend them, you can turn them into cash at most any local bank. You will owe federal income tax on the accrued interest, which will be issued to you in the form of a 1099 by the end of the year.
Go On A Series EE Shopping Spree
You can spend them tax-free. The way to benefit by spending them tax-free is to use them for qualified higher educational expenses for you or even possibly your child. The restrictions are very heavy to qualify for the tax-free nature. For example, in 2008To fully qualify for the tax-free benefit from the Series EE bonds, your 2008 adjusted gross income cannot exceed 67,100 or 100,650 for married couples filing joint.
Just Hang On
Lastly, of course, you can keep them. If you want to hold onto your bonds, keep them in a safety deposit box or convert them into electronic bonds by opening a Treasury Direct account at savingsbond.gov. For me, the few bonds that I had discovered when I was older, made sense to be deposited into Roth IRA. Obviously this is only one option, and you can explore others. Paying off high interest credit card debt would be another viable option. Anything has to be better and a little more exciting that the old Series EE.
What other bloggers are saying about Series EE Bonds:
The Savings Investor: Treasure Department Releases….
My Journey To Millions: Series EE Bonds, Income Tax Planning and Estate Planning
Securities offered through LPL Financial, Member FINRA/SIPC.
