YOUR MONEY


support the government. They were widely marketed to


middle-class families through the 1970s as a safe, government-backed savings tool. But by the 1980s and 1990s,


Remember Savings Bonds?


They went digital and lost their appeal as gifts, but still have tax advantages. ::


BY JENNIFER NELSON S I


avings bonds were once a staple investment for American households. Grandparents gifted


them to children for graduations, births, and baptisms to use for college or some future rainy-day expense, like a car. But over the past few decades,


they’ve all but disappeared, replaced by more attractive alternatives. “I still see savings bonds come


up regularly when families are settling estates or cleaning out old paperwork,” says Patti Yencho, owner of Professional Insurance Advisors in Vero Beach, Florida, an insurance and financial advisory firm. “The reality is that savings bonds haven’t disappeared. They’ve just


gone digital and lost their appeal as gifts.” Indeed, the Treasury stopped


selling paper bonds through banks in 2012. Now, they must be purchased through TreasuryDirect.gov.


LOOK BACK Introduced during World War II, savings bonds (also known as “war bonds”) were seen as patriotic investments, a low-risk way for Americans to save money and


interest rates on bonds fell, and other savings tools, like the 401(k), became more attractive, and in 2010, the Treasury officially ended payroll savings plans.


HOW THEY WORK There are two types of savings bonds: Series EE and Series I. Series EE bonds are purchased


at face value and earn a low, fixed interest rate for up to 30 years. Their key feature is a guarantee backed by the U.S. government that they will be worth at least double their purchase price after 20 years. Series I bonds pay a variable


interest rate. This rate has two components: a fixed rate set at the time of purchase, and a variable rate tied to inflation, which is adjusted every six months. Both types are exempt from state


and local taxes, and federal income tax can be deferred until the bonds are cashed in. The interest may be completely tax-free if used for qualified higher education expenses.


I’ve watched savings bonds become a fascinating tax planning tool that most people completely overlook.” — David P. Fritch,


CPA and founder of Fritch Law Office What to Do With Old Savings Bonds


t’s not uncommon to forget that you have savings bonds.


David P. Fritch, CPA, says he still


sees clients with bonds from the 1980s and 1990s, when rates were higher. Many have forgotten they even had them until they move or organize their files.


82 NEWSMAX MAXLIFE | JANUARY 2026 The good news is that savings


bonds are one of the few assets that cannot be hacked, are nearly impossible to lose, and can be transferred to a named beneficiary outside of probate. They are a security blanket for the risk-averse, but not a growth engine.


If you find old savings bonds


stuffed in drawers and file folders, you’ll want to cash them in — especially if they’re past their maturity date — because they’re earning nothing. However, cashing them in could trigger a tax liability. The first step is to use the TreasuryDirect.gov online


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