US Savings Bonds

Archive for the ‘Redemption’ Category

is inflation outrunning the intrest on US Savings Bonds?

Question: Inherited US Savings Bonds Questions – taxes?

Series I Bonds from mother’s estate were jointly owned by mother and a child. Three of the five children’s bonds remain. (The other two batches were redeemed to help finance a new home for mother.) Now we need to distribute those bonds and other funds equally to the five children. Since the bonds have different accumulated interest (ranging from $2000-$5000) and everyone’s tax rate is different – what is the best way to fairly distribute these bonds? The I Bonds are now paying almost 8%!! OR, can the bonds be cashed and taxable to the estate? OR, is there some way to do this that I haven’t considered. THANKS in advance for any help!!!!

Answer: I am not sure about I-bonds, but MOST assets are inherited at the MARKET value on the date of death. That means any interest accrued up to the date of death is NOT taxed to anyone.

Question: how do US savings bond work?

….and how long should you wait to redeem it to get the most from it?

Answer: Buying a bond from the US Treasury is basically loaning them your money – for which you receive interest. Current US Savings Bonds earn interest for 30 years from month of issue.