Dear Dr. Don,
I bought a really old book in a yard sale. Inside the book, I found four U.S. savings bonds each with a face value of $200. Now they’re not in my name, and I don’t think the people are still alive. What can I do to cash them in?
— Scott Savings
Despite the fact you bought the book with the bonds inside, the bonds aren’t yours, regardless of whether the original owners are still alive, and there’s no way for you to legally redeem them.
Savings bonds are nontransferable securities. While the named owner on a bond, or his heirs, may have some options concerning changing the registered ownership of a savings bond that hasn’t matured, those options don’t extend to you simply because you found the bonds in a book you purchased at a yard sale.
While not precisely reflecting your situation, the “EE/E Savings Bonds FAQs” page on the TreasuryDirect Web site explains why the bonds aren’t yours to redeem.
I noticed savings bonds are being sold through auction sites such as eBay™, but I thought ownership was nontransferable. How does this work?
Savings bonds are sometimes sold as souvenirs or collectors’ items. The sale doesn’t affect the ownership of the savings bond, since by regulation, a savings bond is a registered security and ownership is nontransferable. The United States Treasury still has a contractual relationship with the owner or co-owners named on the bond, not the person who bought the bond at auction. Because of this, the person buying it at auction can’t cash it — he’s just purchased a piece of paper showing a bond that still is the property of the owner or co-owners named on the bond. In some cases, the bond may be the property of the United States Treasury, if it’s a bond that was lost and has since been replaced. Bottom line: it’s not a good idea to buy a savings bond at an auction, because you do not acquire any title to the bond or have any ownership rights.
If possible, you should return the bonds to the person you bought the book from in the yard sale. They may have the ability to redeem the bonds and would be grateful for your kindness.
Read more Dr. Don columns for additional personal finance advice.