A relatively unpublicized new feature of buying your Savings Bonds online is the ability to cash out only part of your bonds, mentioned briefly here. I just noticed this recently, and explored it further in my account with my paper bonds that were recently converted to electronic format. Now that they are electronic – I can partially cash out those too! Apparently the only two restrictions are:
1) The minimum amount you can redeem is $25
2) The remaining value of the bond cannot be less than $25
Here is a screen shot of me trying to partially redeem my bonds:
(click to enlarge)
As you can see, it’s pretty straightforward. Just input the amount you want, and it’s deposted in your bank account in a couple days. Pretty nifty. I gather from this that you can repeatedly cash out amounts as needed. This is easier than having to buy a bunch of smaller increments like 5x$1,000, although I suppose not by too much.
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Great info. thanks. Hey, how about creating a link to my site? I have a link to yours. thanks
By this feature, I assume if you redeem partial of your bonds within 5 years, you are only losing 3 months interests on the exact amount you redeem, not the total principle. Can anyone confirm this?
I assume the same as you, Jack, I don’t see how it could be anything else. This saves them the trouble of having people buy 50 $100 Savings Bonds instead of 1 $5,000 one.
I tend to think when you redeem partial amount, it is considered uncomplete 5-year time for the whole principle, therefore, you would lose 3 months interests on the whole principle, not the 3 months interests of the partial amount.
I don’t see that. Otherwise, you could just go and buy 10 $500 bonds, and break only the ones you need to, and leave the rest. I figure the only reason they let you do partial redemptions is exactly that – people were buying tons of smaller denominations creating excess paperwork and overhead. Notice the smallest amount you can leave in the bond is the smallest bond size you can buy – $25.
However, this is just my opinion and I could be wrong. I won’t speculate any more – I’ll give them a call next week when I have time.
Looking forward to hearing from you after you made the call. I’ve been burned a few times in the past by not reading carefully on the fine prints, that made me over-suspicious if something sounds too good. But that’s still better than sorry.
http://biz.yahoo.com/usat/051024/13187154.html?.v=1
To Jay (and everyone else):
Thanks again for the great info!!!