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Updated on Monday, January 11, 2021
While war bonds are no longer being sold, old bonds that were sold by the U.S. government to finance the country’s participation in wars may still be worth something today. The value of your war bond will depend on factors such as its series type, its denomination and its issue date.
If you’ve just rediscovered these types of bonds you bought years ago, we’ll help you figure out whether you can still cash them in, and how much value those old bonds still hold.
How do war bonds work?
Like any other savings bond, war bonds are debt securities that earn interest over a predetermined period of time. Below are some of the key qualities of war bonds:
- Their face value varies from what you pay upfront: Each war bond had a face value of between $10 and $10,000, which is the amount you receive when the bond reaches the end of its term, also known as maturity. As for what you pay upfront, you typically buy a war bond for somewhere between 50% and 75% of the face value of the bond.
- They are zero-coupon bonds: Unlike standard savings bonds, war bonds are zero-coupon bonds, which means they do not make interest payouts throughout the term. Instead, you receive the full payout when you redeem this type of bond after it has matured.
- They tend to have lower interest rates: War bonds tend to offer returns below market value, making them a less than optimal savings vehicle. For example, when Liberty Bonds first came out, they had an interest rate of 3.5%, which was lower than the standard market interest rates at that time. This was one reason why these bonds were a tool to show your support for your country during wartime, rather than an instrument solely to earn interest.
- Their maturity length depends on the year of issuing: If you bought the original defense bonds from just before the U.S. entry to WWII, you’d have to wait for the 10-year term to end to cash out. Later, Congress extended these bonds’ maturity lengths so that Series E bonds issued between May 1941 and November 1965 could earn interest over 40 years.
War bonds value today
The U.S. Treasury provides a handy tool to calculate the value of your bonds. You’ll need to input the series type (EE, E, I or Savings Notes), the denomination and issue date of the bond. You may also include the bond’s serial number. Then the calculator will spit out the bond’s total value, original issue price, total interest earned and final maturity date.
To get an idea of what these bonds might be worth, let’s look at an example. Let’s say you have a $500 Series E bond from May 1941. Using the calculator, that bond would be worth $1,811.80 today (January 2021), having earned $1,436.80 in interest. You’d also find that it was originally bought for $375, and it matured in May 1981.
How do I redeem war bonds?
If you already have one of these bonds, you can redeem them over the counter at a bank or credit union just like savings bonds. Just be sure to check ahead of time whether the bank can cash bonds and if it has cashing amount limits, as well as whether it can accommodate you if you’re not a customer. You can also send your war bond(s) to the following address of the Treasury site that handles the processing of bonds:
Minneapolis, MN 55480
No matter if you cash your war bond in person or through the mail, you’ll need to provide some sort of identification verification. If you visit a bank in person, this can be your driver’s license. But if you mail your bonds to be cashed, you’ll also need to provide your Social Security number and signature verification on each bond you submit from a certifying officer at a bank where you have an account. You must also include your direct deposit information on FS Form 5396.
War bonds FAQ
War bonds were first sold in the U.S. under the name Liberty Bonds in 1917 to help finance U.S. participation in WWI. Sales of Liberty Bonds were discontinued in 1918, but when war returned to Europe in 1939, the U.S. government began planning to reissue Defense Bonds to prepare for the possibility the country could become involved in the conflict. After the attack at Pearl Harbor and the U.S. entry into WWII, Defense Bonds were rechristened as war bonds.
War bonds helped the U.S. fund its efforts during the war. Specifically, the government raised $21.5 billion in Liberty Bonds to finance its fight in WWI, and during WWII, over 80 million Americans bought these bonds, raising more than $180 billion.
The U.S. government brought back war bonds most recently in December 2001, three months after the Sept. 11 attacks. Labeled as Series EE Patriot Bonds, these bonds have a maturity period of 30 years. Patriot Bonds were sold at financial institutions nationwide until they were discontinued in 2011. The proceeds went toward global anti-terrorism efforts.
War bonds are nontransferable, so generally you cannot cash one that is not in your name. There are a few exceptions, like if you are a parent of a minor who is named as owner or co-owner, are named as beneficiary or are requesting payment as a legal representative.