Daniel thought his government savings bonds would help pay his tuition, wasn’t sure whether they had matured after 15 years, and headed to his Bank of America branch to see if they had and cash them out. He said the bank gave him confusing advice that wound up in his cashing his bonds for less than full price. He writes:
I went to my local Bank of America branch to cash some savings bonds for to pay for tuition. I knew that they were over 15 years old so I assumed that they matured although I wasn’t certain exactly how much they were worth. I had 3 $5,000 EE bonds all purchased within a year of each other and needed to get $12,500 out of them.
I walk into the bank and ask the teller if she could look up how much they are worth. She says “In order to look them up, I have to process them which means that I have to deposit them for you.” I agreed knowing that that I needed to cash at least two of them and possibly all three. When she process the first one, she said that it was worth ~$4,900. I responded that that was odd because I would have assumed that it would have matured already. She said that it did mature, it was just worth less than face value as the point of the face value is to just let you know how much they were purchased for, in this case $2,500. I told her that I didn’t think that bonds worked that way, so she asked around and said that nobody there really knew how savings bonds work.
At this point I wasn’t too happy, but had a tuition bill to pay so I proceded to cash the remaining two. It turns out that those were worth ~6,500 each, enough to pay my tuition. But by the time I knew that, all three were already cashed and I had no recourse.
When I got home, I did a quick Google and found out that bonds are guaranteed to double in value (mature) in 20 years. (The person at Bank of America thought 15 or under). I also found that had I held onto the bond that was only worth $4,900, it would have increased in value by $70 by the time the payment for next semester is due.
I am not happy that A) BofA made me cash the bonds when I wanted to check the value first and B) was so unknowledgeable about series EE (which I think are the most common) savings bonds.
The only reason why I still have a BofA account is so that I have a branch to walk into when I have things like bonds. I didn’t think that I would have to research the bonds because I assumed that the bank would know.
Government savings bonds usually take 18 to 20 years to mature. You’d expect bankers to be aware of that and advise customers accordingly. Thankfully, you don’t need to rely on a banker for help. The US Treasury has a great website full of information about savings bonds, and a calculator that will help you figure out what your bond is worth. We know this advice comes too late for you, but maybe your story can save someone else from a similar fate.
Previously: How To Redeem Government Bonds.