Paper Chase - Savings Bonds & Redeeming
Paper Chase - Savings Bonds & Redeeming
Marjorie Kondrack | Feb 8, 2023
I BEGAN BUYING Series I savings bonds in 1999. At the time, you could purchase them at a local bank and receive paper bonds. Amid 2022’s spike in inflation, those early bonds that I bought were—for a six-month stretch last year—yielding an annualized 13.08%. Not bad for a low-risk investment.
One drawback to buying savings bonds: the limit on how much a person can purchase each year. When I began buying Series I savings bonds, the maximum was $30,000 per person per year. The current annual limit on I bond purchases is now $10,000 per person, plus $5,000 more if you buy I bonds using a tax refund.
While paper savings bonds were once easy to buy, redeeming them is another story. Many banks have stopped cashing them, and the ones that still do have stringent requirements. You typically need to have an account at the bank and to have been a customer for more than a year. In my experience, most banks won’t cash more than $1,000 in bonds at any one time.
I recently visited my local bank to cash a few EE bonds that had reached their final maturity. The bank’s staff told me they no longer cashed savings bonds. Fortunately, I have an account at another major bank and was able to redeem them there.
When I went to that bank recently to cash a bond, I encountered a new teller. After a series of mistakes, she assured me that everything was okay. Then she handed me my deposit slip. It only showed the amount of a check I deposited—but not the proceeds from the bond. The bank manager then straightened everything out. Still, the whole experience was a little unsettling.
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