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Any Bonds Today? By Marjorie Kondrack

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AUTHOR: Marjorie Kondrack on 3/30/2025

You can learn a lot about history by studying it but to truly understand it, you had to have lived through it.   This holds true for the popularity of financial instruments as well.  This is a companion piece to Jonathan Clements’s recent post, “Seeking Uncertainty,” in reference to Savings Bonds.

Savings Bond mania was in full swing during World War II.  They were introduced by President Franklin D. Roosevelt in 1935, before I was born.  But I can remember, even at 5 years old, the tremendous push and popularity for buying savings bonds.  Artists made colorful, eye catching  posters encouraging Americans to save 10% of their wages to “buy their share of freedom”.  Movie stars went on bond rally tours to induce their purchase.   The movies had shorts exhorting patrons to buy “freedom”, liberty” and “war bonds”, as they were sometimes called, with a reminder that patrons could even buy them at the movie theatre.  Savings Bonds made you feel patriotic.  You were helping the war effort.

In 1941, Gene Autry, a popular singing cowboy actor made a recording of  catchy upbeat song entitled, “Any Bonds Today”.  Bing  Crosby and others recorded it too.  Irving Berlin wrote the words and music.  A repetitive phrase from the bouncy song is still remembered—“scrape up the most you can, here comes the freedom man, asking you to buy your share of freedom today”

Through June, 1970, You could get a savings stamp book from the post office where you could buy 10, 25, or 50 cent stamps you pasted in the book until you had $18.75–enough stamps to purchase a bond worth $25.00 face value. If you’re thinking 75 times 25 cents you are right.   

The popularity of savings bonds continued after the war, well into the introduction of “I” bonds in the late 1990s.   The benefits of savings bonds were indelibly ingrained in our psyche.   Gifts of savings bonds were given to us by grandparents, aunts and uncles for all occasions, even as wedding gifts.  They were easy to purchase and came with a nice gift folder. Best of all, they were a low risk, solid investment. But their popularity waned when Treasury Direct took over all functions of the Savings Bond Program.  Grandparents and others also gave up on the complexity of purchasing them.

I stopped buying savings bonds years ago.  The final maturity years of 30 years seemed so faraway at the time of purchase, I never gave a thought as to how much of a problem it would prove to be, keeping track of them.  I had a slew of them, and my husband inherited some from his father—some offering 6% interest.  But It was an ongoing chore to figure out the optimum time to cash them without triggering tax complications;  and they were onerous and time consuming to cash in.  Off putting as well, the rules kept constantly changing.

Time is not on my side and Savings Bonds have long since lost their luster for me.   I agree with Jonathan Clements’s wise assessment of them as being a hassle for investors and for those settling estates, but I get nostalgic when I think of the Andrews Sisters singing and jivin’ to “Any Bonds Today.”

Reminiscences of a bona fide,  but perspicacious, Lady Dinosaur.

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Humble Reader
3 months ago

Like many others we became interested in I-bonds during the 2022 inflation rate peak. We cashed our matured e-bonds and started buying I-bonds every 6 months since then. This year instead of buying more I-bonds we are “rolling over” the 0% fixed rate I-bonds from 2022 and buying replacement I-bonds with the current 1.2% fixed rate. This is safe way to satisfy my itch to “do something” during the current market decline.

William Dorner
3 months ago

Great decision, and I cashed in all those savings bonds in 1996, now very glad I did. Bought a couple I-Bonds in 2022 but sold them in 2024, even that felt like a hassle and it was all done on my computer. I am free of ALL bonds and very happy about it. I am 15% cash using internet banks to get the highest interest rate, and the works for me. That 15% cash will get me through this panic selling because of tariffs. For Stocks Stay the Course.

Rob Jennings
3 months ago

After we engaged our financial advisor 8 years ago and we agreed to a strategy including a significant allocation to TIPs, and our advisor (like Jonathan) noted the hassle of settling an estate, I went through a year long program of selling I bonds, selling them after their semi-annual or annual maturity date so as not to lose 3-month’s interest. Years earlier I had converted all my paper bonds to electronic by sending them in to TD, which made the process simpler. This also simplified our portfolio.

William Perry
3 months ago

The tax problem I have typically seen when matured U.S. savings bonds are cashed after the owner’s death is that the deferred accumulated interest is generally reported as income in the year the bonds are cashed by the person who inherits the bonds. If the bonds are not matured at the death of the owner they are appropriately reported taxable to the person who cashes them under the tax rules. Such income is income in respected to a decedent, much like a withdraw from a inherited traditional IRA.

Tax penalties for failure to file a return or pay tax under the 26 USC 6651 law can often be waived under the provisions known as first time abatement for such failures. The tax and any interest will not be waived.

If the matured bonds, typically old paper bonds, are found after the death of the but before the decedent’s final 1040 is filed then I have seen the interest income from such bonds reported on the decedents final 1040 and as the interest income is reported to the person cashing the bonds then the person cashing the bond also reports that income on their 1040 schedule B with a following line with a same negative amount to “Nominee – decedent’s name and SSN” to zero out the income on the tax return person cashing the bond. This is only appropriate for matured bonds as such income is recognized for tax purposes the earlier of the date matured or date cashed. Often the person cashing the inherited bonds just reports the income on their return and moves on in life. I am not aware of the Treasury actually reporting interest as a taxable event due to the bond simplify maturing.

Yep, redeeming savings bonds after death of the owner can be an administrative headache that is better avoided.

Last edited 3 months ago by William Perry
G W
3 months ago
Reply to  William Perry

When my mother passed, we opted to have her estate pay the taxes on the interest accrued on her bonds (paper I-bonds) as of her date of passing. As she was in a much lower tax bracket than the beneficiaries, that worked out well. If you opt to go this route, be sure to get copies for each beneficiary of the complete tax return showing the tax paid by the estate. As we all were equal benefactors (x) dollar wise, your share of the taxes paid is of course 1/X.

William Perry
3 months ago
Reply to  G W

Sometimes the estate deductible expenses exceed the estate taxable income on the 1041 the estate files. Sometimes the net estate income is a nominal amount. The estate 1041 starts upon the death of the decedent and the executor may pick a fiscal year instead of a calendar year.

If the estate has just a nominal amount of taxable income in it’s 10% bracket letting the estate pay the tax can be an administratively easier route. If the estate makes distributions of income within the chosen fiscal or calendar year then those distributions will generally carry the ordinary income out to the beneficiaries on a 1041 K-1 limited to the lesser of the distribution or the net income in the estate year end. Often executors pick a calendar year for the year end of the estate for ease of administration when the 1041 will have no or low expected taxable income and may wait to make a distribution until after the initial tax year of the estate.

The income tax brackets of an estate are very compressed compared to the individual brackets and the estate reaches the highest bracket of 37% in 2024 when the estate reaches net income of just $15,200.

The 2024 estate income tax brackets are –

Taxable Income 2024 Tax
Not over $3,100 10% of the taxable income

Over $3,100 but not over $11,150 $310 plus 24% of the excess over $3,100

Over $11,150 but not over $15,200 $2,242 plus 35% of the excess over $11,150

Over $15,200 $3,659.50 plus 37% of the excess over $15,200

As complex as income tax can be for individuals my opinion is that estate income tax laws and regulations can take the complexity and pitfalls to a higher and much more tax expensive level.

Best, Bill

Last edited 3 months ago by William Perry
Ken Cutler
3 months ago

I cashed in five $1000 I Bonds at the bank today, netting over $16K. In a perfect world, I would have kept them all to maturity as their fixed interest components were relatively high. As it is, I feel relieved that I was still able to redeem them without dealing with a faceless bureaucracy as Bill C describes below. One more step in the direction of financial simplicity.

Ken Cutler
3 months ago

Marjorie, your experience with the EE/HH conversions and redemptions is exactly the kind of thing I wanted to avoid. The potential hassle down the road isn’t worth the extra dollars I might have gleaned by holding on to my “premium” bonds until maturity.

Ken Cutler
3 months ago

Yes, they do, Marjorie. Thanks for keeping this topic on our radar screens. I enjoyed reading the historical perspective you shared as well.

Bill C
3 months ago

I somewhat agree with Jonathan on individual bonds maybe not being worth the hassle- though I still do use them. I’ve purchased I bonds for over 25 years (and glad I did)- they’ve proved to be a worthy investment (they were my best performing investment during the “lost decade” of the early 2000s), and I continue to purchase them, but am now considering the purchase of individual TIPs in the place of I bonds. The I bonds have become a yearly source of my retirement cash flow in recent years.

I am considering the possibility of moving to a total bond fund in the future, and do allocate a portion of fixed income to one (for simplicity), but haven’t gotten there yet with a larger portion of my fixed income allocation. I largely avoided the bond fund meltdown a few years ago- I did market time based on how I viewed the ultra low yields of bond funds at the time. Whether I was lucky, or perceptive, I like to think the latter, but perhaps I’m deluding myself…

Rick Connor
3 months ago

Marjorie, I fondly recall receiving bonds as a child, and giving bonds to our children and nieces and nephews. I worked in the Aerospace and defense industry for over 40 years. It was a sign of pride if our company ranked highly in # of bonds purchased, I moved all my paper bonds to Treasury Direct about 4 years ago. It wasn’t that difficult and I’m glad I did. I still buy the grandkids Bonds on birthdays, but it does’t have the same impact as the beautiful paper bonds you describe.

mytimetotravel
3 months ago

After reading this it occurred to me I had seen some UK savings bonds in my immigration folder. Turns out, I have three premium bonds worth one pound each bought back in the 60s (I have no idea why). Not worth the postage to redeem, I thought, but a little online research established that there’s an ongoing lottery for premium savings bonds. When I checked, I discovered that back in 1987 one of the bonds won 50 GBP. Now that is worth a little effort to claim.

Thanks for the article, I would never have looked otherwise.

Edmund Marsh
3 months ago

My father got his first regular job in 1943, at age 14, working in a grocery store. He had a number of stories of his memories of that time in his life, mostly about the characters among the citizens in his small town that visited the grocery store. But one story was indicative of his character apparent early in life. He made in wages, as I recall, seven dollars and some change each week. He kept the two plus and gave five to his mother to buy bonds. He continued to practice this saving habit, though not with bonds, throughout life.

Last edited 3 months ago by Edmund Marsh
Norman Retzke
3 months ago

I do recall when gifting bonds was common. I even had some given to me as a child. They were given as an incentive not to spend and we gifted them to the children of others with that intention, too.

As noted, 30 years goes by quickly and one day while cleaning my clothing drawers I found a small stack of savings bonds. I cashed them in past full maturity and bought CDs. As I recall I had to mail them.

More recently, with Treasury Direct I continued to buy treasuries and I-Bonds. Today the banks pay well enough that I only purchase I-Bonds.

Last edited 3 months ago by Norman Retzke
G W
3 months ago

As of today, per TD’s site, that’s $39.2B of matured, unredeemed savings bonds. Ridiculous. Similar to unclaimed money held at the state level.

Bob Smith
3 months ago
Reply to  G W

Who knew? Look out for doge.

G W
3 months ago

Thank you, Marjorie. It is a good tool. I believe the new form is FS 000140 (January, 2025).

R Quinn
3 months ago

I have a bunch accumulated my working years. Each year more hit the 30 year mark. It is getting harder to cash in. Many banks won’t do it. My bank put a $500 limit on cashing them. This year I am going to have to mail them to the Treasury Dept. A hassle indeed. 🤑

Rick Connor
3 months ago
Reply to  R Quinn

Dick, It’s not that hard to convert them to electronic versions. I wrote about this a while ago.

Bill C
3 months ago
Reply to  Rick Connor

I would hesitate to convert paper bonds to electronic currently with treasury direct. I’ve done this for several years with I bonds purchased with tax refunds. Each year the process to convert them seems to take a bit longer. I’m currently dealing with bonds I sent in last August that still have not been converted. I’ve called TD and they cannot tell me when the conversion will happen. Asking to speak to a manager was not allowed, so I contacted my congressman’s office to help with a follow up. I’ve vowed after this experience to not invest further funds with TD that will involve human contact…

Ken Cutler
3 months ago
Reply to  Bill C

I’m headed to the bank today to redeem another batch of I bonds while they will still do it. Stories like this are chilling, and I can’t imagine service improving in the foreseeable future.

Rick Connor
3 months ago
Reply to  Bill C

Bill, thanks for the feedback. That is disturbing. When I did it 4 years ago it was fairly straightforward, if a bit clunky. There is no reason for that.

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