Don’t delay. Cash in matured savings bonds

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Dear Dr. Don,
What is the best thing to do with matured EE savings bonds? Is there a good investment to roll them into so you don’t have to pay taxes on the interest?
— Amy Avoidance

Dear Amy,
There’s only one thing to do with matured Series EE savings bonds and that is to cash them in.

They’ve stopped earning interest, and while the government could use an interest-free loan, if you’ve deferred paying income tax on the interest earnings, it is payable in the tax year the bond reaches final maturity. Series EE bonds have final maturities of 30 years from the issuance date.

You used to be able to continue the tax deferral by using the proceeds of the matured savings bonds to buy Series HH savings bonds. The Treasury stopped issuing Series HH savings bonds in 2004. So, pay the piper, and put this money back to work for you by reinvesting it.

The U.S. Treasury’s Bureau of the Public Debt has an estimated $16.5 billion in matured, unredeemed savings bonds that have stopped earning interest in its coffers. Take what’s yours by cashing them in.

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