US savings bonds helped finance World War II and for decades provided risk-free investments for average Americans, including millions of children who received them as boring but practical birthday presents whose full face value loomed years away.
But they fell out of favor in the 1990s with the rise of the Internet and a plethora of potentially more lucrative and exciting investment options. Now, the humble paper savings bond has become so forgotten that the Treasury Department says 80 million of them, worth a total of $29 billion, have fully matured but have not been redeemed.
Some of that money might be yours. And there’s a bipartisan effort in Congress to make it easier to reunite you with it.
The Unclaimed Savings Bond Act would require the Treasury Department to provide state governments with information, such as serial numbers and names and addresses of owners, to help identify recipients of bonds classified as lost, stolen, destroyed, or unclaimed. Massachusetts and other states have unclaimed property programs that supporters of the bill said are better equipped than a complicated federal government website to connect bond owners with their money.
“Washington needs to pay out these savings bonds,” said Senator John Kennedy, a Republican from Louisiana and the lead sponsor of the Senate bill. “The Unclaimed Savings Bond Act would make sure states have what they need to get this money to its rightful owners — so they can invest it in what matters most to their families.”
Savings bonds have been issued by the Treasury Department since 1935, often purchased for half their value at full maturity, which can take decades to reach. The bonds earn a fixed interest rate and are guaranteed by the federal government.
Savings bonds were issued on paper until 2002, when the government launched electronic versions that redeemed automatically at maturity. Paper savings bonds, which the Treasury stopped issuing in 2014, cease earning interest when they reach final maturity but never expire and there is no deadline to redeem them. Of the nearly 6.9 billion savings bonds issued in the program’s history, only 1 percent have not been cashed in.
But that’s still a lot of money sitting on the federal government’s books as unredeemed debt. And the Treasury Department has had a difficult time getting it back to its rightful owners.
“Treasury’s efforts to increase the redemption of savings bonds are complicated by several factors, including the age and quality of existing records, a complex and manually intensive bond redemption process, and bond owners that either cannot be identified or do not want to redeem their bonds,” according to a June Treasury report.
When the Treasury contacted 24,000 owners of unredeemed paper savings bonds in 2004, 70 percent said they chose not to redeem them even though they were no longer earning interest. Among the reasons they gave were concerns of negative tax implications and not wanting the hassle of the redemption process, the report said.
If people want to redeem their bonds, or determine if they have any that are unredeemed, they have to use Treasury Hunt, an online search tool run by the Treasury Department, and enter the Social Security number of the bond owner.
Many savings bonds still aren’t digitized, so bond owners may only have a paper record of the bonds under their name, said Mark William Bracken, the director of the Unclaimed Property Division of the Massachusetts state treasury. Those papers can easily be misplaced, he said. A larger concern is that savings bonds aren’t always purchased in the name of the recipient, Bracken added.
“If you were going to someone’s birthday or party and you wanted to get them a savings bond, and you walked into a bank to buy a savings bond, chances are you’re not going to have the recipient’s Social Security number,” said Bracken, a past president of the National Association of Unclaimed Property Administrators. “You’re just going to use yours because it just has to go under a Social Security number. The ability to be able to track these makes it very difficult to be able to just say, ‘Hey do I have any savings bonds?’ without some effort being put into it.”
Recipients need the personal information of whoever purchased their bond. Otherwise, they can’t track down the money.
The Treasury Department is trying to address these difficulties. Congress has provided a total of $50 million over the past two years to digitize old records, and a December executive order by Donald Trump called for continued efforts to update records and work with states to find owners of unclaimed bonds.
States returned $2.8 billion in unclaimed property — including uncashed paychecks and the contents of safe deposit boxes — to its owners during the 2020 fiscal year, according to a report published by NAUPA.
Although many people ask the Massachusetts unclaimed property division about recovering their savings bonds, Bracken said his staff could only direct them to the federal website, which still has problems.
“People do know to come to a state website to search for their unclaimed property. What they don’t know is to somehow find and navigate towards an antiquated federal website that is not easy to use, that isn’t updated with all the information, because they haven’t digitized their records, to search and see if they have a US savings bond,” he said. “There’s already a system set up within all the states to be able to do this job.”
Neya Thanikachalam can be reached at email@example.com.