How to Find Lost Savings Bonds

Looking for an MIA or matured savings bond might yield a cash windfall, but first, why don't we figure out what a savings bond actually is? Because in the complicated world of finance -- not to mention the maze of government bureaucracy -- the differences between savings bonds and Treasury bonds (not to mention junk bonds and private bonds) are not all easily distinguished.

First, let's talk about what a savings bond isn't. A savings bond is not marketable, meaning you can't sell it or transfer it. A savings bond is owned by the person who bought it, although you can buy it for someone else. So if you do find you have a savings bond and have no memory of buying it, no fear: You probably aren't buying government-issued securities in your sleep. Most likely, grandma bought one for you without your knowledge.

A bond is basically a loan you've given to the government, which has agreed to pay the loan back, plus interest, for thirty years. In this case, the loan is backed by the U.S. government, essentially making it guaranteed that you will earn money on the bond.

There are a few different types of savings bonds in the United States. Series I Bonds offer rates of return above inflation, while Series EE Bonds offer fixed rates of interest. They can both be redeemed after 12 months, but keep in mind that a 3-month interest penalty will occur if you do so before five years.

Remember that we're talking about government bonds here; there are also private sector bonds, which are offered by a private corporation to raise money. They usually have a higher yield but are also higher risk; they don't have the same stability as government-backed bonds. Private bonds also don't offer ownership in the company, unlike stocks.

Now that we have a firm grasp of what savings bonds are, let's figure out if you actually have a savings bond that's been effectively "returned to sender," is MIA or is just hanging around waiting for you to cash it.

Now that you know what a bond is, you might be slowly realizing that in fact, you actually have one of those (or more likely, that your great-aunt Linda once mentioned buying one for your bar mitzvah). There are a few possibilities for what could be happening with missing savings bonds. Let's start by talking about undeliverable bonds.

Undeliverable bonds are -- guess what! -- not able to be received by the owner. This means that after you (or great-aunt Linda) bought the bonds thirty years ago, they were somehow never received. You move thirteen times, Linda is happily retired in Florida and the government has no way of finding anyone to give money to.

There's also another type of missing savings bond, which is the mature (that is, no longer earning interest) bond that was simply forgotten. Keep in mind that savings bonds are long-term investments (unlike U.S. Treasury notes or bills, which can range from a few days to ten years). While it seems unlikely you'll forget that you put a hundred dollars in your piggy bank three weeks ago, in thirty or forty years, you might push aside the thought to concentrate on more practical matters at hand, like getting married or having kids. Or maybe you'll just be distracted by the awesome hovercrafts we'll all be zipping around on by then.

The American government is aware that many people no longer keep their savings bond certificates locked up in savings deposit boxes. In January 2012, the U.S. government will stop issuing paper bonds; instead, all bonds will be bought and stored electronically. Estimated to save $70 million dollars in taxpayer expense in five years alone, the switch to entirely electronic bonds is also a response by the American government to combat lost or undeliverable bonds [source: TreasuryDirect].

Although it might seem like the government gets greedy satisfaction from holding on to your money, bear in mind that it can't spend it. There are literally billions of dollars in savings bonds that have stopped earning interest, and the U.S. government would like nothing more than to have that money circulating back into the economy. So be a patriot and read on to find out how you can get back your missing savings bond loot.

Now that we know what bonds are and how it's possible for you to forget about them, let's get down to business. How do we get our hands on that sweet government money?

In some cases, it's almost laughably easy. As we said earlier, the government actually isn't keen to hold on to your money, so its trying to make it easy for you to get your money back. Because savings bonds are issued in a series depending on the date, it does matter when a savings bond was bought.

The best-case scenario: If your savings bond was bought after 1974, you're in luck. All U.S. savings bonds purchased after that year have an electronic record. The U.S. Treasury Department set up an extremely convenient database at Treasury Hunt.com, which allows you to enter in your social security number to see if any matured savings bonds are ready for you to grab. Do keep in mind that if someone bought you a savings bond as a gift, that person might have used his or her own social security number.

So, say you looked on Treasury Hunt and nothing came up but you still have a sneaking suspicion that there might be forgotten savings bond floating around waiting for you (or the bond in question was issued pre-1974.) No worries; the TreasuryDirect.com Web site also has forms that you can fill out requesting a claim on a bond that wasn't received, or one that was lost, stolen or destroyed. Don't worry if you're not sure about the serial number; you can fill out names, date ranges and other pertinent information to help them find you a match.

Now that we're savvy about some ways to find savings bonds, let's take a look at how to prevent losing them in the first place. While we're at it, we'll also throw in some information on savings bonds scams and frauds for good measure.

If you've been sufficiently frightened to believe that you're a moment away from forgetting or losing your savings bonds -- thus costing you tens of thousands of dollars -- the U.S. government has your back. It wants you to keep those savings bonds close to your vest and offers some nifty, 21st-century approaches that make it easy to do so.

With the Savings Bond Wizard (a trademarked tool of the Department of the Treasury), you can keep track of and manage your savings bonds with a software application. You simply enter in your bonds, and the Wizard will calculate growth, interest and other changes. You can even print out reports, and it will alert you when your bond has matured so you never need to worry about leaving unredeemed cash in the Treasury Department again. If the Savings Bond Wizard is a bit much for you, the Treasury Department also offers a comprehensive list of tools to help you find earnings and values for bonds.

While you're carefully keeping track of bonds, remember to keep your eyes on those who are also watching your finances closely. Scams and frauds around savings bonds have existed since the bond enterprise began, and many of the frauds even mimic those scams, down to the actual bond they're trying to sell. In fact, these bonds are called historical bonds, which means that they were at one time active but no longer hold any value. Oftentimes, railroad or mining bonds are used to perpetuate this scam. The fraudster will offer these historical bonds, making claims that they're "payable in gold" and "backed by the Treasury Department." Of course, these bonds are entirely worthless.

In 2000, there was also a case of bond fraud where U.S. senior citizens were targeted by a Canadian company to buy "British Premium Savings Bonds." Unsurprisingly, Premium Savings Bonds sold by the United Kingdom are not offered to those outside Great Britain, and American senior citizens were instead paying $5,000 for worthless pieces of official-looking paper [source: Federal Trade Commission]. In 2008, people were attempting to use "private U.S. Treasury bonds" to buy cars; the only problem being that these "private bonds" were supposedly backed by the United States Treasury (not a feature of private bonds, for obvious reasons) and cited the Treasury secretary on that paper bond itself. An even bigger giveaway? U.S. Treasury notes are not given out in paper form.

To learn lots more about savings bonds, unclaimed money and other financial delights, read on to the next page and find yourself rich in knowledge.