What to do with savings bonds?

[bubbles]

I have close to $600 in savings bonds my parents bought when I was born. My dad recently gave them to me and said I can use them however I want. Part of me wants to cash them in and put that money in our Discover savings account where they'll draw more interest than they currently are. Another part of me wants to put that money toward paying down student loans (one loan is like $845, so I could get it mostly paid off. The interest rate is around 5%). We do have a plan to get that loan and another paid off definitely by the end of this year, but hopefully by summer.

So what say you MM? Put them in savings or toward loans?

[madringal]

Go to treasurydirect.gov to see what each bond is currently worth, and what interest rate it is currently paying. Lots of older bonds are paying 4%, while some newer ones are closer to .5%. If it is paying more then I say let them ride. You can't get anything to pay 4% these days.

[bubbles]

Hmm, I didn't know you could do that. Thanks. Do bonds ever expire or anything, or can I just let them sit for a while? They're all about 20-24 years old.

[kershnic]

They stop paying anything at 30 years. I have some that are paying 4% and I've chosen to let them ride until they hit 30 years. I converted them to electronic and when they hit 30 years they'll automatically be cashed out and deposited in my bank account for me to choose what to do next. Find out what they're paying before you choose.

[bubbles]

Good advice. Thanks!

[njohnson1972]

I recently inherited a few and mine weren't earning more than 1%. I cashed them and put them into my son's 529 plan.

[ssmjlm]

Jan 2, 2013 16:02:18 GMT -5 kershnic said:

They stop paying anything at 30 years. I have some that are paying 4% and I've chosen to let them ride until they hit 30 years. I converted them to electronic and when they hit 30 years they'll automatically be cashed out and deposited in my bank account for me to choose what to do next. Find out what they're paying before you choose.

Can I ask how you did this? We have a ton of savings bonds and I would love to not have to keep all the paper around.

[Deleted]

Most of mine will fully mature soon for my 30th bday. When my parents gave them to me 5 years ago I decided I would treat myself to a vacation.

So that's what I'm using them for . Maybe not the most MM decision but I already pay extra toward my student loans and my only other debt is my house...and the amount is too small to make an impact.

[bubbles]

I guess what I'm struggling with, whether I cash them in now or wait, is what to do with them. Our e-fund isn't fully funded but we save substantially each month anyway. I really want to pay down my loans, but I can't decide if I should put my bonds toward that. I'm indecisive lol.

[ssmjlm]

Jan 2, 2013 17:05:25 GMT -5 bubbles said:

I guess what I'm struggling with, whether I cash them in now or wait, is what to do with them. Our e-fund isn't fully funded but we save substantially each month anyway. I really want to pay down my loans, but I can't decide if I should put my bonds toward that. I'm indecisive lol.

If you cashed the bonds now could you make up the $145 to pay off the 5% loan? Most bonds aren't going to make 5%, so if you want that debt gone I would use them for that.

I would just make sure you take the SL payment and plug it into your efund to build that up.

[njohnson1972]

Here is the link to figure out what each bond is worth. Remember, if you cash them, you will have to pay tax on the income. For me, it felt worthwhile. This calculator will tell you all about each bond. You just need the serial numbers.

www.treasurydirect.gov/indiv/tools/tools_savingsbondcalc.htm

[bubbles]

SSM, I have other student loans to pay off, too. This is just the smallest loan and one I can for sure get paid off this year. We are working on our e-fund. NJohnson, thanks for the link!