Over 50 million Americans own approximately $180 billion worth of savings bonds. Purchasing savings bonds has traditionally been easy, understanding the investment is quite a different story.
Spring Lake, New Jersey (PRWEB) January 28, 2014
SavingsBonds.com has identified three things every savings bond owner should know about their savings bond investment. Understanding these basics along with insider hints can help bond owners maximize their investment and avoid costly mistakes.
Over 50 million Americans own approximately $180 billion worth of U.S Savings Bonds. While purchasing savings bonds has traditionally been a fairly easy task over the last 7 decades, understanding the investment is quite a different story. Here are three basics bond owners should know:
Savings bonds are not created equal. Various series of U.S. Savings Bonds, such as Series A-D, E, EE, I, H and HH have been sold since 1935. Depending on the series and the month and year of issue will determine the rules, regulations, interest rates, maturity dates and investment performance that will apply to that specific bond. Hint: Savings Bond calculators management services will indicate cash-in values, interest posting dates, interest rates along with maturity and taxation issues. Cash-in Reports select best bonds to redeem in a portfolio of bonds.
EE bonds are often worth more than the amount printed on the face of the bond. This misconception often results in unpleasant cash-in surprises with unfortunate tax consequences. Many paper EE savings bonds will continue to earn interest beyond their initial maturity (the dollar amount printed on a bond) until it reaches its final maturity, which is usually 30 years from the issue date. Series I Bonds are purchased at face value and the difference between the cash in value and the purchase price in reportable interest Hint: Some EE paper bonds can be worth 5-7 times more than the amount printed on the bond. Use a savings bond calculator to determine how much interest is earned before cashing in any bonds.
Cashing in savings bonds creates a taxable event. The difference between the purchase price of a bond (often one half of the amount printed on the face of paper EE bonds) and the cash-in value is considered reportable interest. When cashing in bonds, interest earned amounts over $10 will be reported on a 1099-INT by the financial institution that redeemed the bond. That amount can be substantial when holding onto a bond until it reaches its final maturity date. The 1099-INT should be included on one's federal income tax return in the year the bond is redeemed. Hint: If two owners (aka co-owners) are listed on a bond, regardless of the name that appears first on the bond, the person who cashes in the bond will receive the 1099-INT.
SavingsBonds.com’s goal is to educate savings bond investors. They have created “Top 5 Savings Bond Myths” and “Top 5 Costly Mistakes” videos along with brief, daily savings bond tips. The videos can be viewed at the company’s website, http://www.savingsbonds.com.
SavingsBonds.com is the #1 non-governmental site valuing over $1.1 billion in savings bonds. Complimentary calculator offers personalized, unique color-coded, Savings Bond Inventory Report© featuring “what this means to you,” helps bond owners avoid losing money and maximize their investment. Extensive, consumer-friendly information center, helpful videos, newsletters, current series bond rates, lost bond services, re-issue services, purchase bonds link, online and popular government forms available.
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SavingsBonds.com VIP Members have 4 services not offered elsewhere. 1. Bond Inventory Report© available/updated 24/7 indicates current bond values, interest rates, timing, taxation and maturity issues, displayed on an easy to understand, color-coded, personalized, bond-by-bond statement. 2. Bi-monthly Alerts! © Emailed summary statements specific to Members' bond inventory, provides inventory totals, interest rates/earnings, helpful strategies regarding current and upcoming financial events, including maturity and taxation issues. 3. Cash In Report© ranks bonds in performance order. Eliminates guesswork on which bonds to cash in first. 4. Daily Bond Tips. The ultimate savings bond Membership offering superior bond management helps investors avoid forfeiture of interest, double taxation and potential IRS tax situations. Bond services, re-issue services, purchase bonds link, online and popular government forms also available.