Even though bearer bonds became illegal for issue in the United States in 1982, some bearer bonds are still floating around. Just because your bearer bond matured 15 years ago doesn't mean it's a loss. While you won't get any of the interest earned on the bond, you can redeem the principal. All you have to do is find a bank or processing center to handle it for you.
Bearer bonds have coupons attached to them that the holder redeems for interest payments. As the bond matures, interest is redeemable before or by the dates stamped on the coupons. Some bonds are called before they mature in the issuer's attempt to save money on interest payments. When a bond is called, the issuer offers to pay the bearer a final interest payment plus the principal -- or face value -- of the bond. All interest payments scheduled after the call become null and void. If a bearer bond is called and the holder doesn't submit the bond and the coupon by the designated date, the issuer will not pay the final interest payment. However, the bearer of the bond will be paid the principal of the bond.
Approaching a Bank
If you attempt to take a bearer bond that matured 15 years ago and redeem it at a bank, you may experience disappointment. Banks have to verify the legitimacy of the bearer bond before they will pay the bearer for it. Some banks, such as Wells Fargo, still allow you to cash bearer bonds in person. Others, including U.S. Bank, require you to mail the bond and coupons into a processing center for payment. Not many bearer bonds are still in circulation, and many banks are reluctant to spend the time and expense handling them.
Contacting the Issuer
If you can't find a bank that will pay you the interest and principal on your bearer bond, look on the bond certificate to find out who issued the bond. Call the issuer and ask how to redeem the bearer bond. When mailing the bond and any coupons, the IRS requires you to send a completed, signed W-9 form with the bearer bond. Also, a letter with instructions about who should receive the payment of funds and the person's mailing address is necessary.
Keep your bearer bonds in a safe place. Since they don't have any identifying information on them, they are just like cash. Anyone can steal them and claim them as their own. Do not allow anyone, such as an attorney, to handle the bonds for you. Once the bonds are out of your possession, there's no way to prove they belong to you.
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