Paper Savings Bonds - Like Gold, but Rarer

[Radagast]

For US taxpayers, if you over pay your taxes, it is possible to get back up to $5,000 of your refund back in the form of paper savings bonds. Savings bonds in general are discussed in places like
https://forum.mrmoneymustache.com/welcome-to-the-forum/series-i-savings-bonds-for-emergency-fund-3-54-interest-rate/

Thanks to a new 2021 baby we got a large refund this year (after paying $7k extra in 2021 for 2020... oh well that money was invested very well) and I opted to receive $5,000 worth of paper Series I bonds. These things have additional government guarantees against fraud and theft which the electronic versions do not have. Additionally, being paper, they are harder to lose not only to fraud but also hacking, EMP's, et cetera. If they burn or are stolen, the government will simply make you whole (though I am sure there is a process, and I don't know what it is). I plan to pay extra every year going forward, and eventually end up with a large stack, which is more worth the time than a small stack would be.

Today in the mail I received












To be honest I had hoped they would send a single one for $5,000, because I don't need savings bond change.

A light for when all other lights go out!

[Tyler]

I bonds are awesome investments, but I had no idea that they are also so cool looking. Great decision!

[Radagast]

They do look cool. Have not compared side by side, but I think the paper quality is bit lower than some I got as a kid in the 90's.

[BicycleB]

I had no idea these would so cool!

[Roots&Wings]

Got mine in the mail yesterday too! Trying to figure out how to gift two Einstein's to my nieces (learning about compound interest, plus the interest is exempt from income tax in their state). Form 8888 didn't allow listing more than two recipients so they're titled in my name.

Apparently you can have family purchase in your name too with their tax refund for add'l $5k paper bonds. I was reading about one guy who did this with his kids tax returns, overpaid by $5k each and listed himself as recipient on form 8888 since the limit is $5k per tax refund, and was able to buy extra $15k in paper bonds.

[Askel]

These things have additional government guarantees against fraud and theft which the electronic versions do not have. Additionally, being paper, they are harder to lose not only to fraud but also hacking, EMP's, et cetera. If they burn or are stolen, the government will simply make you whole (though I am sure there is a process, and I don't know what it is).

I love the design of the paper bonds and since I still hold some EE bonds still paying interest, I'll continue to get paper I bonds to put in that file folder. 

But I'd take issue with the above statement that the paper ones are somehow "more secure".  Every protection that the Treasury offers is the same for both paper and electronic.  All you do is add more scenarios for loss or extra headaches with the physical bonds be it loss, theft, or accidental destruction.

If "EMP takes out the US treasury" is on your financial future BINGO card, your paper bonds aren't going to be worth much more than toilet paper anyway.   

[Car Jack]

I am a HUGE fan of paper iBonds.  How huge, you ask?  Over $400k in value at the moment.  We started very long ago when I was averse to the stock market, having done nothing but trying single stocks, loosing every time.  Then my dad told me about being able to buy them online with a credit card for no fee.  Back then, you could buy $30k per person and they were cashable in 6 months.  At that time, we'd vacation in Aruba, so with our family of 4, I bought $120k worth a year, which gave us enough airline miles to upgrade the 4 of us to first class.  As the credit card bills came in, I'd go to our local DCU credit union and cash some.  As the years went by, I needed to cash less and less.  Eventually the offer stopped and paper bonds generally stopped.  Having taken 8 hours on the phone between my mom and me when my dad passed to collect and cash 2 $50 bonds made out to my 2 kids, I decided I was done dealing with Treasury Direct, so I refuse to get electronic bonds.

How long does it take for me to get cash from iBonds?  Less than anyone can with electronic.  Down to DCU.  Sign with a teller.  It gets deposited and I can take out the cash or see it in my account with no hold immediately.  It takes me 15 minutes to drive to DCU and 5 minutes to leave with the money in place.  And I never need a Golden Grand Pubah Medallion Lion Signature Wax Guaranty to do anything.  Sign, show my drivers license and say my account number.  The end. I've cashed as much as $50k in one visit.

[Roots&Wings]

@Car Jack , how incredible to have been able to buy $30k per person with credit card for rewards, wow! Wish they still allowed that. That's great to hear how easy it is to cash at local credit union.

How do you track the value of your paper bonds? Do you use the calculator on TD website, https://www.treasurydirect.gov/BC/SBCPrice, and save your inventory?

[Radagast]

These things have additional government guarantees against fraud and theft which the electronic versions do not have. Additionally, being paper, they are harder to lose not only to fraud but also hacking, EMP's, et cetera. If they burn or are stolen, the government will simply make you whole (though I am sure there is a process, and I don't know what it is).

I love the design of the paper bonds and since I still hold some EE bonds still paying interest, I'll continue to get paper I bonds to put in that file folder. 

But I'd take issue with the above statement that the paper ones are somehow "more secure".  Every protection that the Treasury offers is the same for both paper and electronic.  All you do is add more scenarios for loss or extra headaches with the physical bonds be it loss, theft, or accidental destruction.

If "EMP takes out the US treasury" is on your financial future BINGO card, your paper bonds aren't going to be worth much more than toilet paper anyway.   

Replacing:  If your paper bond is lost, stolen, or mutilated, you can get a substitute electronic savings bond.

https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ireplace.htm

However, if your treasury direct account is hacked you are on your own, and possibly even if it is their fault.
https://www.bogleheads.org/forum/viewtopic.php?t=225415

So paper savings bonds qualify as the safest investment on the planet so far as I can tell, whereas those held at TD are merely very very safe, probably second safest.

I was thinking of things a Russian out to cause problems might do ;). The principle applies regardless of the hyperbole.

[Radagast]

I am a HUGE fan of paper iBonds.  How huge, you ask?  Over $400k in value at the moment.  We started very long ago when I was averse to the stock market, having done nothing but trying single stocks, loosing every time.  Then my dad told me about being able to buy them online with a credit card for no fee.  Back then, you could buy $30k per person and they were cashable in 6 months.  At that time, we'd vacation in Aruba, so with our family of 4, I bought $120k worth a year, which gave us enough airline miles to upgrade the 4 of us to first class.  As the credit card bills came in, I'd go to our local DCU credit union and cash some.  As the years went by, I needed to cash less and less.  Eventually the offer stopped and paper bonds generally stopped.  Having taken 8 hours on the phone between my mom and me when my dad passed to collect and cash 2 $50 bonds made out to my 2 kids, I decided I was done dealing with Treasury Direct, so I refuse to get electronic bonds.

How long does it take for me to get cash from iBonds?  Less than anyone can with electronic.  Down to DCU.  Sign with a teller.  It gets deposited and I can take out the cash or see it in my account with no hold immediately.  It takes me 15 minutes to drive to DCU and 5 minutes to leave with the money in place.  And I never need a Golden Grand Pubah Medallion Lion Signature Wax Guaranty to do anything.  Sign, show my drivers license and say my account number.  The end. I've cashed as much as $50k in one visit.

Lucky. Some of those early I bonds will be yielding like 10% right now, and with no possibility of loss.

[Radagast]

@Car Jack , how incredible to have been able to buy $30k per person with credit card for rewards, wow! Wish they still allowed that. That's great to hear how easy it is to cash at local credit union.

How do you track the value of your paper bonds? Do you use the calculator on TD website, https://www.treasurydirect.gov/BC/SBCPrice, and save your inventory?

I do that. However so far I only used it for ~$3,000 of ancient savings bonds I received as a child. Not really worth the effort TBH for that tiny amount.

[Roots&Wings]

Thanks @Radagast I'll give that a try. Last year and this were the first I bought ($20k electronic + $5k paper). It seems I-bond interest is excluded from both state income tax and ACA magi, which could be quite valuable in future.

[seattlecyclone]

Thanks @Radagast I'll give that a try. Last year and this were the first I bought ($20k electronic + $5k paper). It seems I-bond interest is excluded from both state income tax and ACA magi, which could be quite valuable in future.

I don't believe this interest is excluded from ACA MAGI. Got a source for that?

In general you get to defer the taxation on the interest until you cash the bond, but once you do I think the interest would count toward your ACA MAGI.

[Roots&Wings]

You're right @seattlecyclone I misread, it's only exempt from ACA magi if used for qualifying education purposes, https://ttlc.intuit.com/community/tax-credits-deductions/discussion/is-ee-i-bond-interest-used-for-qualified-higher-education-expenses-included-in-magi-for-form-8962/00/2058186
and https://www.bogleheads.org/forum/viewtopic.php?t=328667

[Car Jack]

@Car Jack , how incredible to have been able to buy $30k per person with credit card for rewards, wow! Wish they still allowed that. That's great to hear how easy it is to cash at local credit union.

How do you track the value of your paper bonds? Do you use the calculator on TD website, https://www.treasurydirect.gov/BC/SBCPrice, and save your inventory?

I do keep track using remnants of the savings bond wizard, which was far superior to what TD provides today.

The other thing I just though of......DW is executor of her aunt's estate.  Part of the estate was $17k face value savings bonds, EE type.  These were from DW's grandparents.  I filled out the forms and sent the documents needed along with the bonds to treasury direct.  Note that not one of them was less than 30 years old, the oldest being 1941.  Some actual "War Bands" which extended beyond the end of the war as some were from even in the early 50's.  Some of the oldest bonds were probably 30% larger size than what new ones are.  Pretty cool to look at but I had to think that they weren't very smart to not cash them before they started earning zero interest.  They were old school "never tell the government anything" so they weren't listed as assets in the grandparents probate....which was all of $21k.  So now, we had to re-open probate for the grandfather (last to pass) along with the aunt.  Cash the bonds, fill out yet another income tax set, pay the attorney, then distribute and close probate.  THEN, do the same for the Aunt's estate.  Little did these ancestors know, but their "never tell the government anything" is costing DW and her sister a lot of attorney fees, probate costs and a ton of time on our parts.  End of rant....

[jfer_rose]

I will offer my contrary opinion. I have a bunch of paper bonds and it is a priority for me to convert them all to digital ASAP. My first one matured in December and it was a hassle to cash it. My bank doesn’t offer this service and I had to call around to find one that both will cash savings bonds AND will do so for a non-account holder. I learned that many banks that offer this service have limits for how much they will cash in a day.

I have nearly 10K of bonds that mature in September, way more money than I will want converted to paper money. Converting these to digital will allow the money to easily be transferred to my bank account once mature.

Unfortunately, the process of converting to digital appears to be a good bit of work so I have been procrastinating.

[Askel]

My bank doesn’t offer this service and I had to call around to find one that both will cash savings bonds AND will do so for a non-account holder. I learned that many banks that offer this service have limits for how much they will cash in a day.

This has been my experience as well.  Banks that cash bonds are pretty rare around my locale, account holder or not.   

But given that they actually pay reasonable rates now, maybe we'll see this service start to grow again.   

[seattlecyclone]

I will offer my contrary opinion. I have a bunch of paper bonds and it is a priority for me to convert them all to digital ASAP. My first one matured in December and it was a hassle to cash it. My bank doesn’t offer this service and I had to call around to find one that both will cash savings bonds AND will do so for a non-account holder. I learned that many banks that offer this service have limits for how much they will cash in a day.

I have nearly 10K of bonds that mature in September, way more money than I will want converted to paper money. Converting these to digital will allow the money to easily be transferred to my bank account once mature.

Unfortunately, the process of converting to digital appears to be a good bit of work so I have been procrastinating.

Yeah I'm not a fan of the paper ones either. I bought some with my tax refund about five years ago, promptly converted them to digital, and haven't done that with my refund again. The conversion process wasn't all that hard. I had to create a TreasuryDirect account online, do something in there to say i wanted to convert my bonds, then I just mailed them in. It all worked out in the end, but it took them some time to process the conversion, with no intermediate notification that they had received the envelope with my bonds in there and just hadn't processed it yet. That was kind of worrisome. In the rare case where the bonds would have gotten lost somewhere along the way I would have needed to go through a bunch of additional hassle to fix it, and I much prefer just buying them digitally in the first place. Also to this day the converted bonds show up in a different section of the website from the ones I bought online originally, which makes little sense and is another minor annoyance.

[zoro]

It’s interesting I did this for my kids. - one of them got the $5000 bond and the other got a bunch of different bonds from 50 to 1000 making the 5000. They must be using the old ones up.

For US taxpayers, if you over pay your taxes, it is possible to get back up to $5,000 of your refund back in the form of paper savings bonds. Savings bonds in general are discussed in places like
https://forum.mrmoneymustache.com/welcome-to-the-forum/series-i-savings-bonds-for-emergency-fund-3-54-interest-rate/

Thanks to a new 2021 baby we got a large refund this year (after paying $7k extra in 2021 for 2020... oh well that money was invested very well) and I opted to receive $5,000 worth of paper Series I bonds. These things have additional government guarantees against fraud and theft which the electronic versions do not have. Additionally, being paper, they are harder to lose not only to fraud but also hacking, EMP's, et cetera. If they burn or are stolen, the government will simply make you whole (though I am sure there is a process, and I don't know what it is). I plan to pay extra every year going forward, and eventually end up with a large stack, which is more worth the time than a small stack would be.

Today in the mail I received












To be honest I had hoped they would send a single one for $5,000, because I don't need savings bond change.

A light for when all other lights go out!

[Roots&Wings]

It’s interesting I did this for my kids. - one of them got the $5000 bond and the other got a bunch of different bonds from 50 to 1000 making the 5000. They must be using the old ones up.

What is the $5000 like? That's so cool you got one!

[Car Jack]

I've got a bunch of $5k iBonds.  Also a few $10k.  Most of ours were bought back in the day when you could buy $30k a year.

[zoro]

Yes me too. Funnily enough I bought them as an emergency fund when they were paying 3.6% plus inflation. With inflation at 9.6% Those bonds are compounding at 13.2% effectively tax free - that would have to be a hell of an emergency for me to cash those out.

I've got a bunch of $5k iBonds.  Also a few $10k.  Most of ours were bought back in the day when you could buy $30k a year.

[TomTX]

It’s interesting I did this for my kids. - one of them got the $5000 bond and the other got a bunch of different bonds from 50 to 1000 making the 5000. They must be using the old ones up.

What is the $5000 like? That's so cool you got one!

https://www.treasurydirect.gov/instit/savbond/mat/clipart/clipart_savbond.htm

I'll be getting one at the speed of IRS processing + snail mail.... ;)

[Roots&Wings]

Wait @zoro were you able to order $5k per kid with your form 8888 refund ($10k total)? Or each kid filed their own 8888 for $5k?

Thanks TomTX, should've looked it up, Marian Anderson ($5k) and Spark Matsunaga ($10k) are both listed as "no longer available", https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibondslooklike.htm
Lucky if you get one!

[zoro]

Wait @zoro were you able to order $5k per kid with your form 8888 refund ($10k total)? Or each kid filed their own 8888 for $5k?

Thanks TomTX, should've looked it up, Marian Anderson ($5k) and Spark Matsunaga ($10k) are both listed as "no longer available", https://www.treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibondslooklike.htm
Lucky if you get one!

Yes each kid got $5k each as they file as individuals. (I just made a $5000k estimated tax payment before I filed for them.) For my wife and I as we file jointly we only got $5000 us. 
Interestingly one kid got the $5000 as the M. Anderson bond, and the other kid got 4 $1000 Einsteins and $1000 in smaller denominations.  I think they are just using the old ones up...

[MustacheAndaHalf]

I recently received the $5,000 series I bond in the mail, which featured Marian Anderson on the front (I just learned she became a very visible figure in the civil rights movement, after being surprisingly controversial for an opera singer)
https://www.treasurydirect.gov/images/instit/savbond/mat/clipart/maribond5000.gif

Up above, someone mentioned showing up in person and cashing out the bond.  I wonder if my bank will accept deposit of a paper savings bond the same way I got it - through the mail.

Has anyone deposited a paper savings bond through the mail?  (For example, people living abroad)

[Radagast]

Two weeks ago I took my old savings bonds to the bank and cashed them, since the first one reached final maturity, and the rest didn't seem worth hanging on to even if some (not most) were earning 4%, because there were a lot of them and they totaled only $3200. It took like 40 minutes because I needed my written address and signature on each, and the teller had to write a boat load of info, but otherwise it was easy. Glad to have them not hanging over my head for the first time in decades.

Not sure about mail.

[zoro]

I recently received the $5,000 series I bond in the mail, which featured Marian Anderson on the front (I just learned she became a very visible figure in the civil rights movement, after being surprisingly controversial for an opera singer)
https://www.treasurydirect.gov/images/instit/savbond/mat/clipart/maribond5000.gif

Up above, someone mentioned showing up in person and cashing out the bond.  I wonder if my bank will accept deposit of a paper savings bond the same way I got it - through the mail.

Has anyone deposited a paper savings bond through the mail?  (For example, people living abroad)

Yes I have taken some paper ones and put them in my treasury direct account.
By regulation, any bank in the county has to cash them for you (if they are eligible) That's why i kept a bunch around from their inception in 1998 as my emergency fund.
"problem" being they now pay 13.6% - so it would have to be quite the emergency to cash them

[Radagast]

Super jealous of everyone who got a single $5000.

[MustacheAndaHalf]

Super jealous of everyone who got a single $5000.

Part II of that story is I haven't been willing to go through the steps to create a Treasury Direct account, so I can't buy $10,000 worth of I bonds directly.  Since I recall years ago hating to use their stupid interface, I'm reluctant to jump through extra hoops for it now.

So if you have deposited $10,000 into a Treasury Direct account in 2022 and received $5,000 paper I bonds, you've got 3x as much invested in I bonds as me.  Hope that helps reduce the jealousy.  :)

[TomTX]

Super jealous of everyone who got a single $5000.

Well, my single paper $5,000 is from 10+ years ago, before TreasuryDirect was mostly mandatory.... ;)

Still waiting on my tax refund paper I-bonds.

[Radagast]

Happy to say that this year I got a single one of these!


Not happy to say it was dated April 28, so I just missed the 0.9% fixed rate. If I'd a known that, I'd a filed mah taxes three days later!

[slugsworth]

I'm curious how long it took everyone to get their bonds in the mail. I had a $3000 return and received two envelopes each with an Einstein bond but haven't gotten that 3rd one in the mail and am working hope long I should wait before filling out the "lost bond" paperwork.

[Radagast]

I'm curious how long it took everyone to get their bonds in the mail. I had a $3000 return and received two envelopes each with an Einstein bond but haven't gotten that 3rd one in the mail and am working hope long I should wait before filling out the "lost bond" paperwork.

Mine took 22 days, but I'd probably wait 6 weeks before filing paper work. Just me.

[dividendman]

I converted all my paper ones to electronic... I regret it :(

[mistymoney]

I converted all my paper ones to electronic... I regret it :(

Not sure why the regrets? Nostalgia? Novelty?


the paper ones scare me! If I died in a fire - they burn, all my records burn, how would my heirs even know they existed with all the other chaos of the estate going on?

I'm the sort if I was walking down the street with 500 in my pocket - I'd be really nervous about somehow losing it though....Heck, even a much needed $40 in my pocket!!

[dividendman]

I converted all my paper ones to electronic... I regret it :(

Not sure why the regrets? Nostalgia? Novelty?


the paper ones scare me! If I died in a fire - they burn, all my records burn, how would my heirs even know they existed with all the other chaos of the estate going on?

I'm the sort if I was walking down the street with 500 in my pocket - I'd be really nervous about somehow losing it though....Heck, even a much needed $40 in my pocket!!

Yeah, I was half joking. But you can always take a picture of them to keep and if they do get destroyed then you can still get them back electronically from the Treasury, it's just annoying.

I bought some for a relative with my tax refund and it'll be fun giving them. They do look cool.