Do I have to cash in my savings bonds when they mature?
Q. Do savings bonds have to be cashed in and/or interest reported in the year the bonds mature? Can the bonds be transferred or gifted after maturity?
A. No, yes and no. Nobody compels you to cash your bonds in the year of final maturity (30 years for most bonds), but they stop earning interest, so by holding them, you are making an interest-free loan to the government. IRS rules say that you are supposed to report the interest on your return when the bonds reach final maturity. Check the savings bond Web site for info on when bonds stop earning interest.
Once bonds have reached final maturity, they cannot be transferred. It wouldn't do any good anyway. If you transfer ownership of a savings bond to someone else, you are obligated to pay taxes on the interest earned up to that point.
St. Petersburg Times personal finance editor Helen Huntley writes about money topics and answers questions about financial planning, investments and personal income taxes.
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Posted by: Barry | March 16, 2007 at 01:27 PM
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check it out at www.SavingsBonds.com!
Posted by: Matthew | January 03, 2007 at 08:59 AM