Need Extra Cash? Check Your Old U.S. Savings Bonds

Extra money from your savings bonds.

This time of year, we could all use a little extra cash.

One way to raise some is to dig out any old U.S. savings bonds you received as a child and forgot about. If you're over 40, chances are those bonds have stopped earning interest.

In fact, thanks to inflation, a savings bond that has reached maturity loses value each day it sits tucked away in a desk drawer rather than cashed in.

To some, an old U.S. savings bond might sound like chump change, but the U.S. Treasury says billions of dollars in savings bonds that have stopped earning interest remain uncashed.

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This is not a new phenomenon, but you may begin to hear more about savings bonds that earn no interest as we approach the final maturity dates for Series E savings bonds.

First introduced in 1941, the Series E bonds became known as "war bonds" during World War II and continued to be sold after the war ended to tens of millions of American families. They were replaced in 1980 with the Series EE bonds, which continue to be sold today.

The final Series E savings bonds issued in June 1980 came with the promise they would earn interest for the next 30 years. That means the last of the Series E bonds will reach their maturity between now and next spring.

The good news is that those final Series E bonds earned a healthy 6-percent interest rate over the years, according to U.S. Treasury figures, and could be worth quite a bit more than you expect.

What to do if you find an old savings bond that you know little about?

Your best bet is to visit TreasuryDirect.gov, the U.S. Treasury's online marketplace for federal government debt. Look under the Individuals section on the left side of the home page and you will see a variety of links related to savings bonds.

For an old savings bond, start with the Treasury Hunt database, which you can search to figure out if your bond is still paying interest. Just be aware this database includes information only of savings bonds sold after 1974.

If your bond is still paying interest, you can use TreasuryDirect's Savings Bond Calculator to figure out what it's worth.

To redeem an old savings bond, you need to present identification such as a driver's license or have had an account with the institution redeeming the bond for at least six months.

If you want to redeem more than $1,000 worth of savings bonds at one time, your request will need to be sent to what's called a Treasury Retail Securities Site that services your area. But still start with your bank as you will need to sign the bond before a certifying officer at the bank.

That can be a bit of a hassle, of course, but remember, we can all use a little extra cash right about now. Make the effort.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

David McPherson is founder and principal of Four Ponds Financial Planning in Falmouth, Mass. He previously worked as a financial writer and editor for The Providence Journal in Rhode Island. He is a member of the Garrett Planning Network, whose members provide financial advice to clients on an hourly, as-needed basis. Contact McPherson at david@fourpondsfinancial.com.

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