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Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.

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Your tax dollars at work - US Treasury/Savings Bonds

When a paper savings bond is not received, one fills out Treasury Dept Form 3062-4.
https://www.treasurydirect.gov/forms/sav3062-4.pdf
For Series EE and Series I bonds, we no longer issue substitute bonds in paper form. We issue those substitute bonds in electronic form, in our online system.
Really? Just 10 months after the USPS lost a $50 savings bond (part of a 2022 tax refund), the Treasury Department issued me a substitute paper savings bond.

Now I have to invest 1¼% (63¢ stamp) to mail it back. Maybe by 2024 I'll finally have it in my Treasury Direct account.

Comments

  • Just put paper I-Bond in your bank locker. Cashing them at banks should be possible even far down the road, while getting them into the TD account is a hassle - if the Post Office delivers. Definitely use at least the Certified Mail (if not Registered Mail) that allows tracking if use mail to TD - that will be more than 64c.
  • Last year when I mailed the tax refund savings bonds I actually did receive, I didn't send them certified. My thinking was:

    - if the USPS loses the mail, handing them a tracking number will not locate it (I've gone through that process); or
    - if TD says it didn't receive the mail when it did, it will be pointless arguing with them since they'll still insist I file another form for reissue; or
    - if TD does receive the savings bonds, TD will send an email acknowledgement three months later (which is what happened):
    Dear 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 allow up to 13 weeks for review and processing. If we require additional information, 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.
    Remember too, stamps were 8% cheaper back then (58¢):-(

    Keeping the single savings bond in my safe deposit box raises other concerns. Will that box still be around in 30 (now 29) years? Will I? Why create an additional hassle for an executor by keeping it separate from all the electronic savings bonds?

    Cashing savings bonds at banks can have its own problems - while most (but not all) banks will redeem savings bonds, many require that you have accounts with them, sometimes long term.

    after an uptick in fraud, some banks quit accepting them
    Sept 2022, https://www.cbsnews.com/sacramento/news/us-paper-savings-bonds-taking-long-time-to-cash/

    Some banks and credit unions may be able to cash savings bonds, but that service isn’t currently available at Capital One.
    https://www.capitalone.com/learn-grow/money-management/how-to-cash-in-savings-bonds/

    To cash in a savings bond(s) at your local [U.S. Bank] you must [be] ... A signer on a U.S. Bank checking, savings or money market account that has been open for five (5) years or more.
    https://www.usbank.com/customer-service/knowledge-base/KB0209712.html
  • well, that sucks all. so many damn hoops.
  • @msf- If someone with your intellectual capacity and communication resources can run into a brick wall like this can you just imagine what a poor person with limited education and limited resources is up against when dealing with almost any aspect of "the system"?

    Very scary. I have to wonder what percentage of the homeless are in that state because of inability to deal with "the system".
  • Several years ago I did a little volunteer work the Homeless Advocacy Project in your city. With a clear mind and sufficient training and education, "the system" can be navigated. Unfortunately, that help or training is too often needed.

    The Homeless Advocacy Project (HAP) primarily assists with SSI, SSDI, and housing issues for clients who are homeless or at imminent risk of homelessness

    As to brick walls, I just keep pounding away, hoping that once in a while it can make a difference.

    (If you're not familiar with Dr. Who, the video below may not make much sense. Just think of it as representing how long it can take to break through some walls.)
  • Last year we wanted to cash some bonds that had stopped earning interest.
    Our bank (of long standing) wasn't not allowed to cash them -- the paper bonds had to be sent in to the Treasury Department. TD had mailed us a form with good instructions.

    The bank did its job endorsing the back and vouching for us and I mailed them off.

    No word. No deposit into our checking account.

    Wait longer.

    Finally I tried calling TD. I got a recorded message with the 13 week warning.

    But I didn't even know if they had received my envelope. So I called again and stayed on hold for the promised hour and 45 minutes.
    The person I finally talked to was friendly and helpful. Yes, the bonds had been scanned into the system (just a couple of days after I mailed them), but we shouldn't expect to see our money any sooner than the 13 weeks already mentioned.
    At least we knew we were in the system. And their deposit eventually showed up in our checking account.

    Two points:
    (1) Why does anybody think this is acceptable? We loan the US our money and have to go through such a complicated drawn-out process to get the loan repaid.

    (2) The Treasury Department and IRS are underfunded and understaffed, but when Congress voted to help remedy that, the Republicans conjure up a campaign issue that the money will go to unleash an army of vindictive agents.


    If I could simply open and manage a Treasury Direct account online, I'd be interested in government bonds. But I'm not about to get involved with exchanging paperwork with them (like using a tax refund to buy I-bonds).

    David
  • @dstone42, it is better to buy Treasuries at brokerages for several reasons. There are NO FEES or commissions (auctions or secondaries). Transactions are EASY. If you have to sell before maturity (not recommended), you CAN - if you held them at Treasury Direct (TD) and wanted to sell before maturity, you will have to transfer to brokerage first.

    TD was just overwhelmed by the deluge of I-Bond orders. It wasn't always like that. Hopefully, things will return to normal soon. Of course, I-Bonds can be bought at TD only.
  • >Heavy volume is slowing our response time to calls on the phone and cases sent by mail. You can call us from 8 a.m. to 5 p.m. ET, Monday through Friday. Please expect long wait times if you need an agent.

    Estimated processing times for cases you send by mail:
    • Claims for lost or stolen bonds, 6 to 7 months
    • FS Form 5444, for account authorization, 8 weeks
    • Other cases, 13 weeks
    https://www.treasurydirect.gov/

    Sigh.
  • I spoke with TD. Front line wasn't helpful, but I got transferred to a supervisor who provided a clear explanation and took my feedback to clarify the "never received" savings bond form (FS-3062).

    I was told that it is TD policy to replace paper bonds issued within the previous 12 months with paper bonds. After that, you replacements of paper bonds will be electronic.

    The supervisor drew a distinction between "reissued bonds" (e.g. when a savings bond is retitled due to an owner's death), and "substitute bonds". While I can appreciate that subtle difference, the form's wording muddies the distinction. Still, at least I can articulate the one year paper policy.

    The safest thing to do perhaps is to wait until you receive all tax refund bonds (including "substitute bonds" for any lost in the mail), and only then mail them all in together to get converted to electronic form.

    Alternatively, send in the paper bonds you have, and wait a year to request "substitute bonds" for those lost in the mail. Those should then (and only then?) get automatically registered in electronic form.

    Some things still don't make sense, however. Form 3062 conflates "reissued" and "substitute". It says in one place that "When we reissue a Series EE or Series I savings bond, we no longer provide a paper bond". While in another place it says that "For Series EE and Series I bonds, we no longer issue substitute bonds in paper form."

    Another is that I was told that one can request electronic savings bonds as part of a tax refund. Perhaps so, but I can't find how to do that. All I see is Form 8888 that allows you to request paper savings bonds.
    https://www.irs.gov/pub/irs-pdf/f8888.pdf

    Speaking of Form 8888, the TurboTax FAQ "How do I buy savings bonds with my tax refund?" has its own problem. It says that you can use the form to request up to three savings bonds. You have no choice on the savings bonds, but can request refund direct deposits into up to three financial institutions.

    https://ttlc.intuit.com/turbotax-support/en-us/help-article/small-business-processes/buy-savings-bonds-tax-refund/L33edmEa2_US_en_US
  • My sisters and I cashed three matured paper bonds my recently deceased Mom bought years ago.

    It required the three of us to sit in a bank officer's office for over a two hours signing, notarizing etc. We eventually got the money ( took several months) but it was a huge waste of time and required us to all be in the same place
  • @msf, now you got me to think twice about buying the $5K ibond from this year tax refund. Alternatively we would hang on to it and sell it later at our local bank.

    For other treasury we keep all of them at our brokerage,
  • sounds like i don't want to go near savings bonds. how times have changed.
  • That makes two of us !
  • msf
    edited February 2023
    IMHO the problems I or sma3 experienced shouldn't be viewed as so difficult that buying the tax refund bonds isn't worth doing. After all, one's got 30 years to get things straightened out.

    I could have simply mailed the $50 bond back, waited four months or so, and watched for it to show up in my TD account. I was just annoyed by the facts that TD didn't do what it said it would do (issue electronic replacements) and I wound up being the one paying (in postage and personal time and effort) for it. Next time, if there is a next time, I can just wait out however long it takes for things to work as expected.

    And the USPS did deliver 11 out of the 12 savings bonds (each in its own envelope) correctly the first time. Maybe you'll get lucky and get all dozen delivered properly.

    My guess as to the cause of sma3's trouble is that there were various combinations of siblings as co-owners on the savings bonds. While TD says that only one owner's signature is required to cash a paper bond, the bank may have been overcautious and wanted everyone to sign together. These days, how many paper bonds do they cash?

    "Both owners must sign for most other transactions [aside from cashing the savings bond]"
    https://www.treasurydirect.gov/savings-bonds/buy-a-bond/register-a-bond/

    This is just one of a few reasons why I feel it is better to keep the savings bonds in electronic form.

    If you inherit paper bonds and want to get them into electronic form, it's a little tricky because there are instructions for inheriting bonds, instructions for converting to electronic form, but not instructions to do both in one step. I was in that situation a few years ago, back when TD was helpful. I got very clear instructions on what form to use and what to mail in. No problems, handled quickly. I might be able to dig up those instructions if someone needs them.

    Those savings bonds reached final maturity and I got a timely automated email from TD informing me of the pending maturity. After they matured, I was able to log in and cash out nearly immediately. That still works.
  • After all, one's got 30 years to get things straightened out.
    Not sure I want to hold on to them for that long. Five year holding period is required for I bonds before facing the 3 months interest penalty. Selling the paper I bond at local bank sounds reasonable as @yogibearbull suggested. This would be a brand new experience since I last sold stock (certificates from employee stock plan) several decades ago.
  • @msf

    The bonds were still in my Mom's name. We thought about changing that while she was still alive, but it would have required us all to go to bank and do the same thing and she didn't have the stamina for it at 99.

    I don't remember if we could have done it by mailing in the bonds etc, but as you point out, that requires trip to PO and insurance and certification. I love my lost PO staff, but I do not trust the USPS to handle things with 100% efficiency. They lost my daughter's college tuition check. Almost got kicked out of school!
  • sma3 said:

    The bonds were still in my Mom's name. We thought about changing that while she was still alive, but it would have required us all to go to bank and do the same thing and she didn't have the stamina for it at 99.

    I don't remember if we could have done it by mailing in the bonds etc, but as you point out, that requires trip to PO and insurance and certification. I love my lost PO staff, but I do not trust the USPS to handle things with 100% efficiency. They lost my daughter's college tuition check. Almost got kicked out of school!

    Amazingly (to me, at least), it seems that even with power of attorney one cannot change the title on a savings bond.
    https://www.treasurydirect.gov/forms/sav0105.pdf

    What confused me was that the way you wrote your original post, it sounded like all siblings had to be at the bank together to cash the savings bonds. However, each bond could have been cashed alone by the individual sibling named as beneficiary on that bond. Three trips and six hours instead of one trip and two hours; not really an improvement.

    Your experience illustrates the variability in cashing savings bonds in banks. I recently helped (instructed) someone in cashing inherited savings bonds. This person's main bank was Capital One, which is how I learned that Capital One doesn't handle savings bonds. A backup bank initially informed this person that the money would have to be left in an account at the bank for some number of days, or perhaps it was weeks. Fortunately, when they actually cashed the inherited bonds, it was a quick and painless process, and the cash was made available either immediately or within a day (I forget).

    Regarding postal services: while registered mail gets somewhat more careful handling, ISTM its main virtue is insuring valuables. Nonnegotiable instruments like checks and savings bonds have no insurance value. So I don't use registered mail for them.
    https://faq.usps.com/s/article/Registered-Mail-The-Basics

    I use certified mail when I want proof of delivery (e.g. for a legal notice). Even certified mail can get lost (been there, done that). Maybe certified improves your odds of completed delivery, but there's still a risk. If TD says it didn't receive the savings bonds, all the proof in the world to the contrary won't help avoid filing for replacements.
  • I don't think we were listed as beneficiaries, just as her heirs. We could have each taken one bond but the bank might have insisted the proceeds go to each of us in thirds. My sisters tend to not like anything financial and there were other issues to sort out like nominee interest etc.

    I did all the research on how to handle it and knew far more about it than the bank officer
  • Even more complicated then. Executor, letters testamentary, death certificate, the whole nine yards. That can be a handful, whether for savings bonds or anything else. Can be even worse if there's a voluntary administrator rather than an executor.

    https://www.treasurydirect.gov/savings-bonds/manage-bonds/death-of-owner/court-appointed-representatives/
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