Ask Terry Questions EE Savings Bonds — tell my kids?

EE Savings Bonds — tell my kids?

By Terry Savage on December 16, 2014 | Wild Card

I have EE Savings bonds for my children (gifts when they were young-either purchased by relatives or money received for birthdays). They are now in their early 20’s and have no idea they even own them. Two questions:

How are they redeemed?

Would it be a good idea to invest the proceeds in a mutual fund?

Thank you !

Terry Says:   Well, the first thing to do is find out whether they are still paying interest.  Older bonds pay very high rates of interest, and you should not cash them in (or tell your kids about them!) until they have “matured.”  To find out what they are worth you can go to (this is NOT the government website, but easy to use and very helpful).  Or you can go to and work your way through the “individual” section to find out about the current value of your bonds and what they are now worth.

Once they mature — stop paying interest — and be very careful about not cashing them in just before the final interest payment date, then you can let them know and hand the money over to them.  They will owe taxes on the gains since the initial purchase price, which the government can determine in case you’ve forgotten.  Then, if they are working, and if they qualify, and if they are smart, they will put the proceeds into a Roth IRA at Fidelity or Vanguard and let the money keep growing tax-free for their retirement!  If they are NOT smart, they will spend it immediately!!!



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