Dear Dr. Don,
I have paper Series I savings bonds and have been told that I can only cash these savings bonds by mail. Several are $5,000 bonds that have grown to be worth more than $8,000. I am nervous about mailing them.
I have heard they can be changed from paper bonds to electronic bonds and stored in a government account from which you can have bonds sent directly to your personal bank account. The local banks have not been helpful. What do I have to do to set it up this way?
— Tom Trepidation
TreasuryDirect has a program called SmartExchange to convert paper bonds to electronic form. It allows TreasuryDirect account owners to convert Series E, EE and I savings bonds in a special conversion-linked account that is part of your online account.
The TreasuryDirect Web page “Convert Your Paper Savings Bonds Using SmartExchange” lays out the process for you. You should also read through the SmartExchange FAQs page.
Unfortunately, part of the process is to mail the bonds in to the Treasury. So, you aren’t going to be able to finesse the issue of not mailing in the paper bonds by using SmartExchange, but you will have the bonds entered into your conversion account before mailing the bonds.
If it helps ease your mind about mailing the bonds, remember that these bonds are registered to you and can be replaced if lost or stolen. The bonds slated for conversion are not signed by you on the back for payment because it’s your signature on the conversion manifest that authorizes the Treasury to convert your bonds.
The TreasuryDirect account is linked to your bank account, so the converted bonds can be redeemed and you’ll receive the proceeds in your bank account. You could have some very attractive securities in your Series I savings bond portfolio, and I’d suggest you review the individual bonds and make smart choices about which bonds you decide to redeem and which ones you want to keep.
An earlier column, “Keep savings bonds with great rate,” could help you with that decision.
To ask a question of Dr. Don, go to the “Ask the Experts” page, and select one of these topics: “Financing a home,” “Saving & Investing” or “Money.” Read more Dr. Don columns for additional personal finance advice.