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Idle savings bonds losing interest

If you have U.S. savings bonds tucked away in a safe-deposit box or a drawer, you may want to see if they've matured. If they have, they've stopped earning interest, and you may as well have that money stashed under the mattress.

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There are 32 million expired bonds, worth about $12.9 billion, sitting around not earning interest, according to the Bureau of Public Debt.

Daniel Pederson, author of "Savings Bonds: When to Hold, When to Fold and Everything In-Between," estimates these bond owners have lost well over $2 billion in interest over the past 12 years -- money Uncle Sam has been using interest free.

Pederson says the government should have begun notifying bondholders years ago when their bonds were maturing.

Many early bonds had initial maturity dates that have been extended by 10 years one or more times. Those bonds ended up having final maturities of 30 or 40 years. Pederson believes many of the people who own these bonds are elderly and have been confused by the changing maturity dates.

"The vast majority of Americans, I can tell you, don't have a clue about this 30 or 40 year thing," says Pederson. "The government gives the position, 'Well, gosh, we've been publishing it since 1987 so we don't know how they don't know.' Well, the answer is that not everyone reads the paper every day and not everyone reads every savings bond article."

Retiree Merton Smith of Tucson, Ariz., recently did some research for his fiancee and discovered she owned three bonds that had expired as long as two years earlier.

"We had no way of knowing. You can't figure them out by the date on the bond because some have been extended. It's just too difficult to go through and figure everything if you want to remain accurate," says Smith.

Pederson says the government makes about $1 million a day in interest from this unclaimed money.

"The government did virtually nothing in terms of notifying people until I blasted them in 1999. Essentially, I said you don't have the right to use this money interest-free without making an attempt to notify the bondholders. They set up a unit of 12 people to call these bondholders -- 2 million people."

Getting the word out
The Bureau of the Public Debt is the branch of the U.S. Treasury that deals with this issue.

Public affairs officer Stephen Meyerhardt says the folks in that bureau unit have made nearly 47,000 phone calls to bond owners in the past couple of years and have had a 62 percent success rate in reaching them. He's familiar with Pederson's complaint, but argues that the Treasury has done a lot in recent years to tell people their bonds have expired.

"We do public service announcements on radio and television, there are inserts with IRS tax refunds, we've made a lot of effort to talk with the news media in the last five or six years, and there are brochures, fliers, all kinds of information in the banks."

Meyerhardt says a major problem is that early bond sales were stored on microfilm. Transferring that information to a database is difficult, labor intensive and costly. Complicating the problem is the fact that many people have moved or died.

"Mostly it's the serial numbers and the names of the people who bought them. We didn't use Social Security numbers before 1974, so we don't have a lot to go on with some of that older debt."

The bureau's Web site also lists expired bonds and gives bondholders an interactive way to see how much their bonds are earning and when they mature.

Nevertheless, the value of unclaimed, matured savings bonds is growing by about $1 billion a year.

Don't let government bureaucracy or your own less-than-stellar record keeping separate you from money that's rightfully yours, money that should be earning interest for you.

It's time to get savvy about savings bonds.

These savings bonds have matured, they no longer earn interest. If you have one, you can redeem it at your local bank.


May 1941 through May 1975,
December 1965 through May 1975

June 1952 through May 1975
January 1980 through May 1985
Savings notes
All issues
A, B, C, D, F, G, J, K
All issues

The Web site for the Bureau of Public Debt can help you inventory your bonds to determine their current redemption value, how much interest they've earned and their final maturity date. The site is free, but a spokeswoman admits the database isn't exhaustive.

Treasury Hunt is being updated on a continual basis but the bond you're looking for may not be listed. Also, if you ordered a savings bond and never received it, you may find it here. The site lists savings bonds that were returned to the Treasury as undeliverable.

If you have questions about a bond that isn't listed, call Savings Bond Customer Service toll-free at 1-866-388-1776, or call the Federal Reserve Bank that handles savings bond transactions in your area.

If you bought Treasury bills, notes or bonds through the government's Treasury Direct Web site and haven't received a payment, you may be able to track it through the Bureau's Treasury Hunt site. Meyerhardt says information on 19,000 undeliverable Treasury Direct payments, equaling $29 million, has recently been added to the site.

The Bureau's Savings Bond Wizard is a downloadable Windows-based program that you can use to inventory your savings bonds on your computer.

If you don't have Windows or don't want to download a program, try the Bureau's Savings Bond Calculator. It does the same thing.

Those estimated 2 million people who own matured, unclaimed bonds are missing out on an average of $4,500 each -- plus whatever interest that money could have earned. If you're one of those people, a little research can go a long way toward fattening your bank account.



-- Updated: April 12, 2005





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