Every birthday and Christmas growing up, my grandparents got me saving bonds. Most are twenty years old at least.
My wife and I are trying to consolidate/eliminate all debts but the mortgage.
Would it be a bad idea to take the savings bonds to the bank, cash them out, and drop it on the debt?
Is there something smarter and more productive than this that I can do? Currently there sitting in the safe.
http://www.treasurydirect.gov/BC/SBCPrice
Have they reached maturity?
It depends what type of bonds you have, and when they were issued. Which savings bonds are no longer earning interest?
Honestly, I forgot they even existed until my ddad mentuoned them.
So in answer to your question, I ain't got a clue.
Here, this .pdf will help you estimate if they have matured and not gaining any more, or not.
https://www.treasurydirect.gov/forms/savpdp0027.pdf
Ok, so if they haven't matured, do I leave them alone? If they have matured, do I use them to eliminate dabt
I would say:
If they are not mature, keep them.
If they are old enough that they are past the point of continued interest, definitely sell them.
If they are mature but still earning interest... tough call, but probably sell them. I suspect the interest you are paying on your debt is a higher rate than the interest you would earn on the bonds. You would have to do research on that yourself.
Find out what the interest rate is on all of your debt and compare it to the interest rate of the bonds. If the bonds are older and not matured, they probably have a decent interest rate on them unlike anything today.
From there do what makes sense as long it's not hey let's pay off this debt so I can get more debt situation.
I have always placed a high value on not having any debt. So, if mature then pay off debt.
We also are very anti debt.unfortunately the last few years have not been kind, and it really hit home last week just how rough of shape we are in concerning debt and liquid assets.
Will cash the mature ones, put them on the highest interest rate debt. Compare interest accruing on immature to the interest on highst remaining debt. If debt intetst is higher, cash out and use. If not, leave alone.
This sound right?
sounds like a plan
Dusterbd13 wrote: We also are very anti debt.unfortunately the last few years have not been kind, and it really hit home last week just how rough of shape we are in concerning debt and liquid assets. Will cash the mature ones, put them on the highest interest rate debt. Compare interest accruing on immature to the interest on highst remaining debt. If debt intetst is higher, cash out and use. If not, leave alone. This sound right?
That sounds pretty good.
Personally, I might use the bonds that you cash to pay off the debt(s) with the smallest dollar amount first, rather than automatically dumping it into whatever debt has the highest interest rate. It totally depends on the value of the bonds, and the amount of debt(s), but it might be nice to owe fewer people, and actually eliminate some of the smaller debts if possible before you try to tackle the larger ones. It would help me to feel a bit of accomplishment and focus on fewer total debts rather than dumping a bunch of money into a single debt with a high interest rate that would only chew it up and continue to accumulate while other debts continued to build. Then, you apply the money you'd be paying towards the smaller debts to the larger ones until everything is paid off. YMMV of course, I'm sure others will have differing opinions.
To cash in, I just take the mature ones to the bank, right?
Dusterbd13 wrote: To cash in, I just take the mature ones to the bank, right?
Yes. That is how I cashed mine out. Mine went into my wedding.
STM317 wrote:Dusterbd13 wrote: We also are very anti debt.unfortunately the last few years have not been kind, and it really hit home last week just how rough of shape we are in concerning debt and liquid assets. Will cash the mature ones, put them on the highest interest rate debt. Compare interest accruing on immature to the interest on highst remaining debt. If debt intetst is higher, cash out and use. If not, leave alone. This sound right?That sounds pretty good. Personally, I might use the bonds that you cash to pay off the debt(s) with the smallest dollar amount first, rather than automatically dumping it into whatever debt has the highest interest rate. It totally depends on the value of the bonds, and the amount of debt(s), but it might be nice to owe fewer people, and actually eliminate some of the smaller debts if possible before you try to tackle the larger ones. It would help me to feel a bit of accomplishment and focus on fewer total debts rather than dumping a bunch of money into a single debt with a high interest rate that would only chew it up and continue to accumulate while other debts continued to build. Then, you apply the money you'd be paying towards the smaller debts to the larger ones until everything is paid off. YMMV of course, I'm sure others will have differing opinions.
this … the WAY to go is really up to you … both are acceptable methods to using "found" money … cutting back on the interest $$$ going out, or getting rid, totally, of smaller debts will feel good .. allowing you to concentrate on the larger
Beer Baron wrote: I would say: If they are not mature, keep them. If they are old enough that they are past the point of continued interest, definitely sell them. If they are mature but still earning interest... tough call, but probably sell them.
I agree, my wife started buying a savings bond every payday when she started working in 1966. So the last few years we have had a bunch that have fully matured and are no longer drawing interest. We have been cashing them in and reinvesting the money, but it hurts since all of them she bought before 1995 were drawing 4% interest.
index funds (S&P 500) will equal that … you gotta get awfully lucky/be awfully "good" to beat that by picking stocks … or even good mutual funds … mine have done GREAT, but still barely equal/beat/lose a bit to the S&P 500 funds … especially when you factor in the lack of maintenance charges in an index fund … they sorta run themselves …
not sexy, but may well be the best bang for you buck if you're in the market
You will have to pay fed income tax on the interest when you file your 2015 return. Not sure if it's long-term capital gains or ordinary income.
In reply to AngryCorvair:
I was going to say the same. Allow some cash to pay taxes on the interest.
should be long term capital gains … the mature rate on those is rather lengthy … I know for my mutual funds and any individual stocks I bought there was a 1 yr cutoff to go from ordinary income to long term capital gains …
but keep in mind that this is GRM not the IRS 
Dusterbd13 wrote: To cash in, I just take the mature ones to the bank, right?
You can do it online or take them all to the bank and let them help you. you can then decide which ones to cash in.
When I was a kid my grandmother would give us $25 for Christmas that my parents took and bought a $50 savings bond. When I was buying my first house I cashed a load in and had some extra cash towards our down payment. As a kid I was pissed because my cousin would buy something cool like a Cox gas powered car..........hindsight.
time to hijack thread...
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