After dealing with the estate of a family member, I saw firsthand the benefits of simplifying my financial situation. (They need a better term than “death cleaning“.) If not for me as I get older, definitely for my wife and/or kids in the future. This conflicts with my constant desire to try out new stuff and chase rates, but I’m working on it. Paper savings bonds are definitely something that could easily be lost or forgotten.
Even if they are found, there are vanishingly few banks that will redeem paper bonds anymore. Another option is to physically mail them in with FS Form 1522 and cash them out directly, but that requires a signature guarantee or notary. All more potential work for others.
My ultimate goal is to liquidate all of my savings bonds at TreasuryDirect and replace them with cash or TIPS (thus removing an account to track) in an existing brokerage account, but ideally in a manner sensitive to both the current interest rates being paid and my marginal income tax rate. It is also possible that I may use them for higher education expenses, which would be within the next 6 years.
Therefore, the best option seems to be to convert these paper bonds into electronic format at TreasuryDirect.gov, combining them with my existing electronic savings bonds, and then liquidating them as needed. The conversion process does not require a signature guarantee nor notary. Electronic bonds also provide the option of partial redemptions. The main risk is the hassle of lost paper bonds if something goes wrong in transit.
General conversion directions. Here are the conversion instructions directly from TreasuryDirect:
- Go to your TreasuryDirect account.
- Select ManageDirect.
- In the Manage My Linked Accounts menu, select Establish a Conversion Linked Account. If this option doesn’t appear, you have a Conversion Linked Account already. Skip to step 6 below.
- Review the information about conversion linked accounts.
- Select Create Account.
- In the Manage My Conversions menu, select How to Convert My Paper Bonds.
- Follow the instructions there.
- When you prepare your paper bonds to submit for conversion, do NOT sign the back of the bonds.
Basically, you have to enter the information on each of your paper savings bonds and they will create a numbered manifest with all of the bond data. You must send in your original paper savings bonds along with this signed manifest. Here is what you must certify with your signature:
By signing below:
1. I certify that I am requesting conversion of the listed savings bonds. I further certify that any bond not registered in my name was purchased by me as a gift to the bond’s registered owner.
2. I acknowledge and accept the terms and conditions set out in the regulations for TreasuryDirect at 31 CFR Part 363.
3. I understand that converted bonds are automatically redeemed upon final maturity and the interest reported to the IRS. I also understand that a Zero-Percent Certificate of Indebtedness (C of I) is
purchased with the redemption proceeds of the bonds.
4. I certify that all information provided is true, correct, and complete.
They state that you will not receive any notifications on the process, but you can check the status online:
You will not receive a notification when we receive the bonds or when the conversion process is complete. However, you may check the status of your bonds at any time, through your TreasuryDirect Conversion linked account. Click ManageDirect, then “View my manifests.” Select the manifest you wish to view and click the Select button. You will see one of the following notations in the Status column next to the bonds on your manifest:
In Progress – processing in progress;
Pending – Customer Service needs additional information;
Returned – Bond returned to you as ineligible for conversion;
Not received – Treasury did not receive the bond listed on the manifest;
Canceled – Bond closed in previous transaction. For example, a replacement bond was issued after being reported lost, stolen, or destroyed; or
Converted – Bond converted. Check your Current Holdings or Gift Box in My Converted Bonds Linked Account, or your Minor Linked Account.
My paper bond conversion timeline. I mailed them both in on July 17th, 2024 using USPS Priority and the default tracking number. . As they were titled in two different names, I sent them in two separate envelopes with two separate manifests. The tracking number confirmed basic delivery.
Roughly two weeks later on July 30th, 2024, I received the following e-mail confirmation, only for one of us (my wife). Apparently there are notifications after all? However, I never received any e-mail confirmation for myself for my own customer number. It’s possible that I overlooked it, but I did search my Junk and Spam folders. Here is the text of the e-mail.
Customer Number: XXXXXXX
Customer Name: Mrs. MMB
Case Number: 1-XXXXXXXDear Customer,
This is a system generated email to communicate we received your Savings Bonds/Treasury Marketable Securities materials.
Cases are worked in the order they are received in our office. Your request is important to us and will receive attention as soon as possible. Please be aware of our estimated processing times to process your case which are based on the case type:
Cases requesting to cash Series EE and/or Series I paper savings bonds held in your name, at least 4 weeks.
Cases requesting to cash Series HH savings bonds held in your name, at least 3 months.
Unlocking your TreasuryDirect account, updating bank information in that account, or converting your paper savings bonds into electronic bonds in TreasuryDirect, at least 4 weeks.
Claims for missing, lost, or stolen bonds, at least 6 months.
All other cases, at least 20 weeks.
If we require additional information to process your case, we will contact you. Thank you for your patience.Please retain the Customer Number and Case Number referenced above to streamline any future actions associated with this request. Also note, you may receive multiple email notifications and Case Numbers depending on the type of transaction(s) you have requested.
If you have additional questions, please use the Contact Us link on TreasuryDirect.gov.
We appreciate your interest in U.S. Treasury securities.
Sincerely,
Treasury Services
Initially, I was a little concerned about my missing confirmation e-mail, but I figured there was nothing I could do until it was either processed or enough time had passed that I could claim it as lost. I told myself that there is a clear process to claim lost or stolen paper savings bonds using FS Form 1048, in case it came to that. I had made copies of everything in order to maintain a record of the serial numbers.
On August 14th, 2024 (two weeks later), I decided to log into my TreasuryDirect account to check on things. Given they stated “at least 4 weeks” above, I was surprised to find that all of the paper bonds (both my and my wife’s) showed in our respective “My Converted Bonds” account. You can also check the status of existing manifests under “ManageDirect” and then “Manifest Information” (screenshot at top of post).
So there you have it. As of later 2024, it took roughly two weeks to get receipt confirmation (maybe) and another two weeks (maybe) to process. Everything worked out in the end, and hopefully this information will help set some reasonable expectations for others.
p.s. I was able to add a new linked bank account using routing and account numbers with no additional security steps. Not even microdeposits. I don’t know if this is a good move overall, but I am personally glad to not have to hunt down a local bank branch that will grant me a medallion signature guarantee like they were requiring several years ago.
