Many of our clients, and often their children, have savings bonds tucked away in a drawer or safe deposit box. We often get asked what’s the best way to keep track of your savings bonds. How can you tell the value of your bonds and what interest rate they are paying? And when is the right time to cash them in?
The best way to track your savings bonds is to log on to the Savings Bond Calculator on the Treasury Direct website and type in the series, denomination, serial numbers, and issue dates of your bonds (all this information can be found on the face of your bonds).
The online app will calculate the current value of your bonds, showing you how much interest has accrued to date as well as the current interest rate being paid. You only need to type in this information once; you can save your work and retrieve the file to update bond values whenever you choose.
Financial Tip: Normally, interest earned on savings bonds is deferred until you cash them in. At that time, you are taxed with the entire amount of interest earned in one fell swoop. If your savings bond holdings are sizable, cash in a portion of your bonds each year, so the tax due is spread over more than one year. If possible, to keep the tax bill down, cash in bonds and report the interest in years you have lower than normal income.