What to Do With a Childhood Savings Bond

savings bond

A savings bond used to be a common gift, though not always a welcome one. Well-meaning relatives gifted savings bonds for your birthday or the holidays. The goal was often to help you pay for college in the future. But for us kids, all we knew was it wasn’t the Pound Puppy or Care Bear we really wanted!

Nowadays 529 plans and other higher-interest earning options have replaced the savings bond. But that doesn’t mean they’ve disappeared. In fact, they may be sitting at the back of your closet right now. But you are cleaning out your closet or your safe deposit box, and now this long-forgotten and unexpected savings bond can help you clean up your finances.

It’s Still Good

That savings bond is still worth something. That’s the good news. Savings bonds gain value over time by earning interest and keep earning interest for 30 years. They pay interest every six months until they mature. So depending on how long it’s been since you cleaned your closet, you may still be making money as you read this. Now there are some steps you have to take to get money in return.

What Type of Savings Bond

There are several kinds of savings bonds. So you much determine which kind you have in your possession. Savings bonds are a contract between you and the federal government. If it’s an old bond from your childhood it is probably either an EE or an I bond. It will be clearly specified in the title which one you have.

EE bonds are similar to savings accounts. Paper bonds used to be sold at half the face value (you paid $50 for a $100 bond) and the interest continued to increase even after the face value is reached, so your $100 savings bond is probably worth more than $100 now. Paper EE bonds are no longer available and digital EE bonds are purchased at face value.

I bonds are similar to EE bonds. The chief difference is that the interest earned on an I bond is determined by a combination of a fixed rate and an inflation rate.  So there is some cost-of-living protection for the bondholder.

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Find Out What It’s Worth

Before you decide to cash in the savings bond, you’ll probably want to know what it’s worth. The interest rates and even the way interest rates are determined have changed over the years so it matters when you got yours. The best way to determine the current value of your savings bond is to use the Treasury Direct website. Whether you want to cash in the bond or continue to let it mature is then up to you.

There are some penalties for cashing in the savings bond early. If you redeem the bond early, you will lose three months’ worth of interest during the first five years. There are no penalties after five years. The earliest you can cash in the bond is after one year. If the bond is more than 30 years old, it has stopped earning interest and you should cash it in.

While you will have to pay federal taxes on your bonds, you do not have to pay state or local income taxes. There are some exemptions – most notably when bonds issued after 1989 are cashed in to pay qualified higher education expenses at an eligible institution.

Visit the Bank

Most banks should be able to help you cash your paper bonds. If they aren’t, they should be able to direct you to a financial institution that can. You will have to prove your identity to cash in your old bonds. You will have to fill out an tax form either when you redeem the bonds or at the end of the year. Your tax preparer should be able to help you with this part of the process.

More Money-Saving Reads:

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  • How to Get Your Free Annual Credit Report
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  • How Credit Impacts Your Day-to-Day Life

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4 Ways Health Insurance Can Save you Money

Close up of a doctor's white coat pocket full of pens and medical equipment.

Many health insurance shoppers will consider premium costs when purchasing health insurance. The full cost of a health planalso includes your out-of-pocket expenses, like the deductible, copays, and coinsurance.

As important as it is that your health plan is affordableand that the monthly premiums fit into your budget, it’s also important to consider the value health insurance offers. If you’re considering opting out of health insurance next year, evaluate the value of the following health plan offerings before you finalize your decision:

  • Discounted rates
  • Cost-sharing
  • Preventive care coverage
  • Additional features

While everyone has a different financial situation with varying constraints, health insurance is a worthwhile investment.

1. Discounted Rates 

Health insurance companies negotiate costs directly with hospitals and other medical care providers. These rates are then included with the health plans offered by the company. 

Some plans only have negotiated rates for in-network providers. Others have different negotiated rates for in-network care and out-of-network care. All health plans offer coverage for emergency services when a patient is admitted—whether or not the care was received from an in-network provider.

The amount the hospital or clinic usually charges is higher than the negotiated rate. The differences between the negotiated rate and the standard rate varies depending on how the insurance company has negotiated. 

However, when you receive an Explanation of Benefits (EOB) with the breakdown of costs, you’ll see:

  • What the hospital or clinic usually charges
  • What the negotiated cost actually was
  • What portion of the bill your health insurance company paid
  • The amount left for you to pay

2. Cost-Sharing 

Health insurance plans come with an annual deductible and annual out-of-pocket maximum. The deductible is the amount of money the insured must pay in cost-sharing over the course of the year before the insurance company takes on a greater responsibility for the costs. The out-of-pocket maximum is higher than the deductible. Once it is reached, the insurance company is responsible for the remainder of your covered medical expenses.

Health insurance plans often have separate deductibles for prescriptions and medical care. Health insurance plans that offer out-of-network coverage will have a different deductible and out-of-pocket expenses maximum for out-of-network care and in-network care. 

Health insurance companies determine cost sharing in a few different ways depending on how your plan works. With a traditional plan, you’ll have copays and coinsurance. Coinsurance means that the insured pays a certain percentage of the discounted medical bill.

Copays are a set amount that the insured pay when they receive health care services. There are usually set amounts for prescriptions, primary care visits, specialist visits, and emergency services. Payment may also be required beyond the copay after the bill is processed by the insurance company. The copay contributes to this payment.

High-Deductible Health Plans (HDHPs) with Health Savings Accounts (HSAs) work differently. Instead of having copays and coinsurance, you pay for your medical expenses as you receive medical care. You can use the funds in your HSA to pay these costs.

Funds in your HSA roll over year to year and can be invested. The money you put into your HSA is tax-free. The monthly premiums for HDHPs tend to have lower premiums because a greater cost responsibility is on the policyholder. Some people take advantage of these plans while they are healthy and save funds for medical expenses later in life.

The specifics of cost-sharing differ from plan to plan, so carefully reviewing your plan before signing up will help you understand how the cost-sharing works.

3. Preventive Care Coverage 

Because of the Affordable Care Act, health insurance plans cover preventive care fully. While the future of the Affordable Care Act is uncertain, coverage for preventive care is an important way that health insurance protects your finances.

Doctors can detect some health problems early on and implement treatment plans to prevent the issue from developing further. Regular visits to the doctor go a long way in avoiding expensive bills later, especially for preventable issues.

It’s especially important for people with some diagnoses and conditions to visit a specialist regularly as needed because some health issues can be managed successfully and future complications can also be avoided.

4. Additional Features 

Health insurance companies also offer the following helpful features with their plans:

  • Telemedicine
  • Nurse help lines
  • Care management

These additional features are helpful resources for people. Telemedicine allows plan members to work with a doctor over the phone or through video chat in non-emergency situations. Some companies offer this service to plan members for free, like Oscar. Other companies also offer it as an a la carte supplement to health insurance, like GoHealth.

Others may charge a fee when you use the telemedicine service. The fee for the telemedicine service may vary based on your plan and your insurer and can be cheaper and faster than setting an appointment with your doctor or visiting an urgent care.

Nurse help lines are another common offering among health insurance companies, including Cigna. This hotline gives people quick access to a nurse without needing to leave their home. In non-emergency situations, the nurse can answer questions and give advice on scheduling appointments. 

While these benefits are nice and do not require you to establish care with a doctor, you can always call your doctor’s office with questions to get similar assistance. If the doctor can’t take your call, one of the assistants can take a message and get back to you with a response in a non-emergency situation. Even after hours, there’s usually a doctor on-call. 

Another benefit some health insurers offer is care management. These can be helpful to people who want support with improving their health. Companies like Kaiser Permanente offer this with many of their plans to help members with chronic conditions.

Is the Investment Worth It? 

It’s easy to see how much your health insurance plan saves you on medical care when you review the EOB.

It’s trickier to determine if the cost of monthly premiums is worth the savings. If you have health insurance, you can keep track of how much you are spending on medical care, prescriptions, and premiums. Evaluate you EOBs over the course of the year to understand what the costs would have been without insurance.

Medical procedures, surgeries, and emergency medical treatment are more expensive than preventive care. Some of these events can be planned for in advance, but many cannot. 

Because of the high financial cost of these services, not having health insurance is a risk for your financial stability.


Alice Stevens loves learning languages and traveling. She currently manages content for BestCompany.com, specializing in personal finance, health insurance, Medicare, and life insurance.

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Guide to Managing Finances for Deploying Service Members

Life in the military offers some distinct experiences compared to civilian life, and that includes your budget and finances. The pre-deployment process can feel overwhelming, especially when you’re organizing your money and bills. 

It’s important you provide your family with everything they need to keep you and any dependents comfortable and stable. This means gathering paperwork, making phone calls to service providers, creating new budgets, and organizing your estate. The more you prepare ahead of time, the less you have to worry about the state of your investments and finances when you return home. 

To help make the process easier, we’ve gathered everything you need to know for deployment finances. Read on or jump to a specific category below:

Pre-Deployment Needs

  • Review Your Estate
  • Reassign Financial Responsibilities
  • Update Your Services
  • Build a Budget
  • Prepare a Deployment Binder

Deployment Needs

  • Protect Yourself From Fraud
  • Adjust Your Savings
  • Financial Assistance

Post-Deployment Needs

  • Update Your Budget
  • Pay Off Debt
  • Review Legal Documents

Before Your Deployment

There’s a lot of paperwork and emotions involved in preparing for deployment. Make sure you take plenty of time for yourself and your loved ones, then schedule time to organize your finances for some peace of mind. 
investments, and dependents. It’s an important conversation to have with your partner and establishes:

  • Power of attorney
  • Living will
  • Last will and testament
  • Long-term care
  • Life insurance
  • Survivor benefits
  • Funeral arrangements

Anyone with property, wealth, or dependents should have some estate planning basics secured. These documents will protect your wishes and your family in the event you suffer serious injury. There are several military resources to help you prepare your estate:

  • Defense Finance And Accounting Services’ Survivor Benefit Plan and Reserve Component Survivor Benefit Plan
  • Department Of Defense’s Military Funeral Honors Pre-arrangement 
  • Service Member’s Group Life Insurance
  • Veterans Affairs Survivor’s Benefits
  • The Importance Of Estate Planning In The Military
  • Survivor Benefits Calculator

Servicemembers Civil Relief Act (SCRA) allows you to cancel a housing or auto lease, cancel your phone service, and avoid foreclosure on a home you own without penalties. Additionally, you can reduce your debt interest rates while you’re deployed, giving you a leg up on debt repayment or savings goals. Learn more about the SCRA benefits below:

  • Terminating Your Lease For Deployment
  • SCRA Interest Rate Limits
  • SCRA Benefits And Legal Guidance

 

Build a Deployment Budget

Your pay may change during and after deployment, which means it’s time to update your budget. Use a deployment calculator to estimate how your pay will change to get a foundation for your budget. 

Typically, we recommend you put 50 percent of your pay towards needs, like rent and groceries. If you don’t have anyone relying on your income, then you should consider splitting this chunk of change between your savings accounts and debt. 

Make sure you continue to deposit at least 20 percent of your pay into savings, too. Send some of this towards an emergency fund, while the rest can go towards your larger savings goals, like buying a house and retirement. 

Use these resources to help calculate your goals and budgets, as well as planning for your taxes:

  • My Army Benefits Deployment Calculator
  • My Army Benefits Retirement Calculator
  • Mint Budget Calculator
  • IRS Deployed Veteran Tax Extension
  • IRS Military Tax Resources
  • Combat Zone Tax Exclusions

 

Prepare a Deployment Binder

Mockup of someone completing the deployment checklist.

Illustrated button to download our printable depployment binder checklist.

It’s best to organize and arrange all of your documents, information, and needs into a deployment binder for your family. This will hold copies of your estate planning documents, budget information, and additional contacts and documents. 

Make copies of your personal documents, like birth certificates, contracts, bank information, and more. You also want to list important contacts like family doctors, your pet’s veterinarian, household contacts, and your power of attorney. 

Once you have your book ready, give it to your most trusted friend or family member. Again, this point of contact will have a lot of information about you that needs to stay secure. Finish it off with any instructions or to-dos for while you’re gone, and your finances should be secure for your leave. 

While You’re Deployed

Though most of your needs are taken care of before you deploy, there are a few things to settle while you’re away from home. 
Romance and identity scams are especially popular and can cost you thousands. 

  • Social Media Scams To Watch For
  • Romance Scam Red Flags
  • Military Scam Warning Signs

 

Adjust Your Savings 

Since you won’t be responsible for as many bills, and you may have reduced debt interest rates, deployment is the perfect time to build your savings.

While you’re deployed, you may be eligible for the Department of Defense’s Savings Deposit Program (SDP), which offers up to 10 percent interest. This is available to service members deployed to designated combat zones and those receiving hostile fire pay.

Military and federal government employees are also eligible for the Thrift Savings Plan. This is a supplementary retirement savings to your Civil Service Retirement System plan.

  • Savings Deposit Program
  • Thrift Savings Plan Calculator
  • Civil Service Retirement System
  • Military Saves Resources

 

Additional Resources for Financial Assistance

Deployment can be a financially and emotionally difficult time for families of service members. Make sure you and your family have easy access to financial aid in case they find themselves in need. 

Each individual branch of the military offers its own family and financial resources. You can find additional care through local support systems and national organizations, like Military OneSource and the American Legion. 

  • Family Readiness System
  • Navy-marine Corps Relief Society
  • Air Force Aid Society
  • Army Emergency Relief
  • Coast Guard Mutual Assistance
  • Military Onesource’s Financial Live Chat
  • Find Your Military And Family Support Center
  • Emergency Loans Through Military Heroes Fund Foundation Programs
  • The American Legion Family Support Network

After You Return Home

Coming home after deployment may be a rush of emotions. Relief, exhaustion, excitement, and lots of celebration are sure to come with it. There’s a lot to consider with reintegration after deployment, and that includes taking another look at your finances. 

 

Update Your Budget

Just like before deployment, you should update your budget to account for your new spending needs and pay. It’s time to reinstate your car insurance, find housing, and plan your monthly grocery budget. 

After a boost in savings while deployed, you may want to treat yourself to something nice — which is totally okay! The key is to decide what you want for yourself or your family, figure if it’s reasonable while maintaining other savings goals, like your rainy day fund, and limit other frivolous purchases. Now is not the time to go on a spending spree — it’s best to invest this money into education savings, retirement, and other long-term plans.

In addition to your savings goals, make sure you’re prepared to take care of yours and your family’s health. Prioritize your mental health after deployment and speak with a counselor, join support groups, and prepare for reintegration. Your family and children may also have a hard time adjusting, so consider their needs and seek out resources as well. 
FTC | NFCC 

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